Key takeaways
What drove WLFI’s price hike?
WLFI broke out of a 49-day downtrend, gaining 33% as a bullish MACD crossover confirmed increasing buying pressure and renewed market interest.
How are World Liberty Financial traders reacting?
Shorts face liquidations of over $3.4 million, and holding above $0.20 could push WLFI towards its $0.25 resistance zone.
The market as a whole is showing signs of recovery and World Liberty Financial (WLFI) is leading today’s gainers. The token soared over 33% in 24 hours, reclaiming key resistance levels on strong trading momentum.
Momentum appears to be building, with technical indicators suggesting that bullish investors may be returning to the market again.
Rally breakout sparks interest
WLFI broke out of descending diagonal resistance that lasted for 49 days. The move confirmed a technical reversal, setting the next upside target near $0.25 – the upper boundary of its previous channel.
Source: TradingView
A rally to this level marks the WLFI’s highest trading point since September 22, and the momentum will likely determine whether the altcoin maintains further gains.
However, a breakout from this level could send WLFI back below the resistance trendline, pushing prices lower to find support around $0.11 on the chart.
The upward movement is strong
The bullish momentum still appears to be able to strengthen, according to recent technical readings.
The Moving Average Convergence Divergence (MACD) indicator issued a bullish signal as it formed a golden cross pattern. This occurs when the blue MACD line crosses above the orange signal line, suggesting that buying momentum is returning and WLFI may re-enter the bullish region.
Notably, the MACD is on the bearish side of the market, indicating that there remains significant upside potential if the current trend continues.
Source: TradingView
Meanwhile, the Money Flow Index (MFI) increased to 55.57, reflecting renewed inflows. An upward trend in MFIs implies that investors are reallocating their liquidity towards WLFIs, which could strengthen the ongoing recovery.
Shorts face liquidation risk
Short traders in the derivatives market were under pressure as many were squeezed out of their positions.
Data from CoinGlass showed that investors who opened short contracts on WLFI in the past 24 hours suffered the largest losses, with forced liquidations totaling around $3.45 million.
Source: CoinGlass
The liquidation chart further indicates that as WLFI continues to recover, more positions could be liquidated.
For example, a move to $0.184 would trigger approximately $3.91 million in contracts, while a rally to $0.168 could add another $2.46 million in potential liquidations, forcing other short traders to lose.
