I'm monitoring this WLFI and, honestly, the signals aren't very good at the moment. The token is forming a bearish flag pattern on the 4-hour chart, which historically suggests a drop of about 20% to around US$ 0.066. Considering the current price around US$ 0.07, that would be a significant pressure. I've seen similar situations with Luna crypto before—when liquidity becomes fragile and governance is questioned, things can collapse quickly.

What worries me most is the on-chain issue. I discovered that wallets linked to the project deposited between 3 to 5 billion WLFI as collateral in Dolomite to borrow about US$ 75 million in stablecoins. Basically, they're using the token itself as collateral to obtain real liquidity—that's extremely risky. Even worse: they transferred over US$ 40 million to Coinbase Prime, and the pool utilization is at 93%. When that happens, any price movement can trigger cascading liquidations. This is exactly the kind of dynamic we saw in Luna crypto crises, where structural fragility amplifies losses.

There's another problem: an unlock of more than 16 billion tokens still locked could hit the market. That will significantly dilute current holders. Coupled with technical pressure and liquidity issues, it becomes quite complicated.

And then there's the governance issue that's making people uncomfortable. Justin Sun, who invested heavily in the project, publicly accused the existence of a hidden blacklist function in the contract that could freeze assets without warning. If that's true, it directly touches the promise of decentralization. Sun also questioned whether governance votes are truly transparent. These control and trust issues are often the final trigger for mass exits—like the Luna crypto scenario we saw.

In the short term, I’ll watch whether WLFI can break above the resistance line or if it continues to fall. If it breaks upward, it could test US$ 0.081 and US$ 0.085. But honestly, with illiquid collateral, imminent unlocks, and these governance issues still open, the risk is much higher than the opportunity. The coming weeks will be decisive to see if this becomes another Luna crypto case or if they can regain trust.