The price of World Liberty Financial (WLFI) continues its decline, dropping by 30% since its recent launch. Let's look at the main reasons for this drop.
Reasons for WLFI Price Decline
There are four main reasons why the WLFI price is in a downtrend. First, the price decline is part of the price-discovery process that occurs after token drops. Most newly launched tokens tend to drop in the initial days of their launch, as seen with Wormhole and ZKsync which also experienced price drops.
Second, WLFI price is likely falling as early investors and insiders are selling. Unlike in the stock market, there is no lockup expiration in crypto, allowing insiders to start selling from day one.
Third, assets associated with Donald Trump generally do not perform well in the long term. For example, the Official Trump meme coin initially surged to $49.25 in January but has since plummeted to $8, erasing billions of dollars in value.
WLFI Price Dynamics
The 30-minute chart shows that WLFI price has slumped from $0.32 on Monday to $0.2160. It has formed a bearish flag pattern, which often leads to further downside. Demand is falling, and token unlocks worth billions are planned, increasing the odds of continued price decline. The next point to watch will be at $0.2075 or lower.
WLFI Prospects
Despite the current negative trend, there is a chance of a short-term rebound known as a dead-cat bounce. This occurs when an asset in a free-fall stages a brief recovery but then resumes its downtrend. Such a scenario could occur for the WLFI token in the near future.
The WLFI price remains under pressure due to mass sales and the characteristics of new tokens associated with Donald Trump. The prospects for a recovery remain uncertain.
