World Liberty Financial Token (WLFI), a DeFi governance token linked to the Trump family, could have signaled a significant market collapse just hours before the Bitcoin move, in accordance with a brand new evaluation from data provider Amberdata.
The report examines trading activity on October 10, 2025, when roughly $6.93 billion in leveraged crypto positions were liquidated in lower than an hour. Bitcoin (BTC) fell about 15% and Ether (ETH) fell about 20%, while smaller tokens lost as much as 70%.
Amberdata noted that WLFI began a pointy decline greater than five hours before the final market downturn. At this point, Bitcoin was still trading near $121,000 and showed little immediate stress.
“A five-hour lead time is tough to dismiss as a coincidence,” Mike Marshall, who wrote the report, told Cointelegraph. “This duration is what separates a very actionable alert from a statistical artifact,” he added.
WLFI anomalies before the sell-off
Researchers analyzed three unusual patterns, including a spike in trading activity, a pointy divergence from Bitcoin, and extreme leverage, to find out whether WLFI signaled stress ahead of the final market selloff.
WLFI's hourly volume rose to around $474 million inside minutes of the political news related to the tariffs, about 21.7 times its normal level. Meanwhile, WLFI perpetual futures funding rates reached about 2.87% every eight hours, translating to an annual borrowing cost of nearly 131%.
WLFI financing rating. Source: Amberdata
The study doesn’t allege that insider trading occurred. Instead, it argues that the best way crypto markets are structured can lead to certain assets having greater importance than their size suggests.
WLFI's holder base is concentrated amongst politically connected participants, in contrast to Bitcoin's widespread ownership, in accordance with the report. Marshall said the trading pattern seemed to be “instrument specific,” meaning activity was focused on WLFI moderately than the broader crypto complex.
“If it were higher evaluation (informed participants could read tariff headlines more quickly and draw higher conclusions), one would expect this to be reflected more broadly,” he said. “What we actually saw initially was concentrated activity within the WLFI.”
The timing is remarkable. Trading volume accelerated about three minutes after the general public tariff news. Marshall said such speed suggests prepared execution moderately than retailers interpreting headlines in real time.
The connection between WLFI and the final market decline relies on leverage. Many crypto trading platforms allow traders to make use of multiple assets as collateral for borrowed positions. When WLFI fell sharply, the worth of this collateral plummeted, forcing traders to sell liquid assets like Bitcoin and Ether to cover their positions. These sales caused prices to fall and led to further liquidations across the market.
WLFI crashed before Bitcoin. Source: Amberdata
WLFI responded to emphasize faster than Bitcoin
Amberdata data shows that WLFI's realized volatility reached nearly eight times that of Bitcoin in the course of the episode, making the corporate particularly vulnerable to emphasize. Researchers argue that structurally fragile, highly leveraged assets may move first during market shocks.
Marshall said the outcomes shouldn’t be interpreted as evidence that WLFI can reliably predict downturns. The evaluation covers a single event and more data could be required to determine statistical consistency. Nevertheless, he considers the behavior to be significant.
“So the useful lifetime of this signal is restricted. It is helpful now since it shouldn’t be adequately monitored,” he said. “The moment consensus occurs, the alpha is taken away by arbitrage. That's how all market signals work. The ones that persist are those nobody pays attention to.”
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