Report: WLFI may be an "early warning signal" of a collapse in the cryptocurrency market

According to a report by Cointelegraph, a study by data provider Amberdata found that WLFI exhibited significant warning signs during a massive market liquidation on October 10, 2025. More than five hours before approximately $6.93 billion in leveraged positions were liquidated across the network, WLFI began to decline sharply, while the price of Bitcoin remained around $121,000, showing no obvious signs of pressure.

The study suggests that due to many trading platforms supporting WLFI as collateral, the token's extreme volatility led to a decrease in collateral value, forcing traders to liquidate BTC and ETH to cover their positions, triggering a chain reaction across the entire market. Mike Marshall from Amberdata stated that this five-hour lead time is hard to consider a coincidence, as WLFI's high leverage characteristics make it more sensitive to market pressures.