WLFI price has crashed: will this Trump coin rebound soon?

The WLFI price continued its strong downtrend as investors stayed on the sidelines and memories of Trump’s original memecoin linger.

World Liberty Financial (WLFI) token plunged to $0.2230, down by 30% from its highest point since its recent launch. Its market capitalization has fallen from over $7.7 billion to $5.52 billion . 

Why the WLFI price is tumbling

There are four main reasons why the WLFI price is in a downtrend. First, the token is crashing as part of the price-discovery process that happens after airdrops. Most newly launched tokens tend to drop in the initial days of their launch. For example, Wormhole (W) plunged by 17%, while ZKsync fell by 30%.

Second, the WLFI price is likely falling as some of the early buyers and insiders sell. Unlike in the stock market, there is no lockup expiration in crypto, meaning that insiders can start selling from the first day.

Third, and most importantly, assets associated with Donald Trump don’t do well in the long term. Official Trump (TRUMP) meme coin initially surged to $49.25 in January and has now plunged to $8, erasing billions of dollars in value.

Similarly, Trump Media & Technology Group stock trades at $16, down by 70% from its highest point this year.

Further, it is unclear how the millions of dollars in USD1 will benefit WLFI holders. Data show that USD1 has over $2.7 billion in assets, which could generate over $110 million if invested in 10-year U.S. Treasuries that yield 4.2%.

Will the new Trump coin rebound?

The 30-minute chart shows that the WLFI price has slumped from $0.32 on Monday to $0.2160. It has formed a bearish flag pattern, which often leads to more downside. 

With demand falling and token unlocks worth billions are planned, odds are that the coin will continue falling in the near term. If this happens, the next point to watch will be at $0.2075 or lower.

However, the coin could rebound in the near term, which would be a dead-cat bounce. A DCB happens when an asset in a free-fall stages a strong but brief comeback and then resumes the downtrend.