Trump-Backed WLFI Sent ‘Warning’ Signal Five Hours Before Bitcoin Plunge

▲ WLFI/ChatGPT-generated image

An analysis has found that the governance token of a cryptocurrency project led by the family of Donald Trump served as a powerful early warning signal ahead of a major market crash.

According to a report released on Feb. 16 (local time) by crypto data provider Amberdata, the World Liberty Financial (WLFI) token showed unusual activity about five hours before the sharp decline in Bitcoin (BTC) began. The analysis indicated that prior to the $6.93 billion cascading liquidation event that occurred on Oct. 10 last year, WLFI had already entered a steep decline, preemptively reflecting mounting market stress.

Mike Marshall, an analyst at Amberdata and the report’s author, highlighted that WLFI plunged while Bitcoin was still trading steadily around $121,000. “A five-hour lead time is difficult to dismiss as coincidence,” Marshall said. “It represents a meaningful time gap that can be interpreted as an actionable warning rather than a statistical anomaly.” During the turmoil, a wave of leveraged positions was liquidated within an hour, causing Bitcoin to fall about 15% and Ethereum (ETH) to drop roughly 20%.

Amberdata identified three warning signs suggesting WLFI foreshadowed the broader market downturn. Immediately after political news related to tariffs broke, WLFI’s hourly trading volume surged 21.7 times above normal levels to reach $474 million. In addition, WLFI perpetual futures funding rates implied an annualized borrowing cost of 131%, indicating extremely overheated speculative activity. The report also noted that WLFI holdings are concentrated among politically connected participants rather than being broadly distributed like Bitcoin, which may have contributed to the token’s early reaction.

While the study does not prove insider trading, it suggests that structural vulnerabilities in the crypto market can link movements in specific assets to wider domino effects. Because assets like WLFI are used as collateral on many exchanges, a drop in its value forced traders to liquidate more liquid assets such as Bitcoin and Ethereum to maintain collateral requirements. Analysts believe this chain reaction of forced selling ignited the broader wave of mass liquidations across the market.

However, Marshall cautioned that WLFI should not be viewed as a universal indicator capable of predicting every downturn. The analysis is based on a single event, and if market participants begin closely monitoring this signal, arbitrage activity could diminish its effectiveness. Nevertheless, industry experts note that in environments with limited oversight, movements in highly volatile, concentrated assets can meaningfully precede broader macro-level market shocks.

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