There is a study that suggests that WLFI could have predicted the crypto-crash hours before Bitcoin.

Amberdata’s new data analysis suggests that World Liberty Financial Token, a DeFi governance coin affiliated with Trump, could have predicted a market collapse hours before Bitcoin.

You can also find out more about the following: report Examines trading activity for Oct. 10, 2020, at which time approximately $6.93 Billion in leveraged crypto positions were liquidated In less than an hour. Bitcoin (BTC), Ether, and other tokens have all fallen by around 15%.

Amberdata determined that WLFI had begun a rapid decline over five hours prior to the broader stock market’s downturn. Bitcoin’s price was around $121,000 at that time and there were no signs of immediate distress.

“A five-hour lead time is hard to dismiss as coincidence,” Mike Marshall, the author, spoke to Cointelegraph. “That duration is what separates a genuinely actionable warning from a statistical artefact,” He also added.

Related: Senators ask Bessent to probe $500M UAE stake in Trump-linked WLFI

Anomalies in the WLFI before sale

Researchers examined three patterns that were unusual, such as a spike in trading, a divergence sharply from Bitcoin, and the use of extreme leverage to see if WLFI was a sign of stress prior to a market crash.

WLFI’s daily volume jumped by 21.7x to $474m, within minutes, after the tariff news. The funding rate on perpetual futures for WLFI reached 2.87% each eight-hour period, which is equivalent to an annualized loan cost of about 131%.

This study makes no claim that insider trading took place. The study argues instead that due to the structure of cryptocurrency markets, certain assets can be more important than their apparent size.

The report states that WLFI is owned by a small number of participants who are politically well-connected, as opposed to Bitcoin, which has a more widely spread ownership. Marshall claimed that the pattern of trading appeared “instrument-specific,” The focus of the activity is on WLFI, not the wider cryptosphere.

“If this were superior analysis (sophisticated participants reading the tariff headlines faster and drawing better conclusions) you’d expect to see that reflected more broadly,” “He said” “What we actually saw was concentrated activity in WLFI first.”

It is noteworthy that the timing was so precise. The trading volume increased approximately three minutes following the public announcement of tariffs. Marshall said that this speed is more indicative of a planned execution than a retail trader interpreting headlines.

It is leverage that has caused the market to drop. Many cryptocurrency trading platforms allow traders to use multiple assets as collateral when borrowing positions. As WLFI plummeted, so did the value of this collateral, which forced traders to dispose liquid assets, such as Bitcoin and Ether, to cover positions. These sales drove prices down and caused further liquidations in the entire market.

Related: Trump family’s WLFI plans FX and remittance platform: Report

WLFI reacted quicker than Bitcoin to the stress

Amberdata data indicates that WLFI realized volatility was nearly eight times greater than Bitcoin’s during this episode. This makes it particularly vulnerable to stress. According to researchers, assets that are highly leveraged and structurally vulnerable may be the first ones affected by market fluctuations.

Marshall warned that the results should not be interpreted to prove that WLFI is able to predict recessions with accuracy. This analysis only covers one single event. More data is needed to ensure statistical consistency. He still believes this behavior to be significant.