WLFI could fall 20% on insider loans, backdoor claim

World Liberty Financial’s WLFI token faces technical and on-chain pressures that point to a potential decline of about 20% in April.

On a four-hour chart the token has formed a bear flag, a continuation pattern that often follows a sharp drop. Applying the pattern’s measured move gives a downside target near $0.066 if price breaks the flag’s lower trendline on rising volume. A move above the flag’s upper trendline would invalidate that setup; the 20-day and 50-day exponential moving averages sit near $0.081 and $0.085 as the nearest upside reference levels.

On-chain data from Arkham Intelligence show wallets linked to the project deposited an estimated 3–5 billion WLFI tokens as collateral on the Dolomite lending platform to borrow about $75 million in stablecoins, including USDT and USDC. More than $40 million of the borrowed funds was later transferred to Coinbase Prime. The positions pushed Dolomite’s pool utilization to roughly 93%, restricting withdrawals.

Because WLFI is thinly traded and largely illiquid, using the token as loan collateral reduces margin for error. A sharp decline in WLFI’s price would lower the value of posted collateral, which can trigger liquidations, increase lender losses and add selling pressure on the token.

Market participants are also tracking a proposed unlock of more than 16 billion WLFI tied to still-locked public allocations. The additional supply would become transferable if those allocations are released.

Justin Sun, who has reported investing about $75 million in WLFI and serves as an adviser, accused the project of embedding a hidden blacklisting function in the token’s smart contract that would allow the team to freeze wallets without notice. Sun called the capability a ‘trap’, described ‘token scandals’ and said governance votes lacked transparency, calling for unlocks and clearer information for holders.

WLFI is traded on crypto markets against pairs such as WLFI/USDT. Market participants are watching whether the price breaks the flag’s lower boundary toward the $0.066 target in April or moves above the moving averages, which would signal the flag has failed.