Mega-whale addresses holding more than 1 billion tokens have been steadily reducing their positions since February 6. On February 17, during the price rally, they dropped holdings dramatically from 9.45 billion to 8.35 billion WLFI. That represents 1.1 billion tokens sold directly into the strength.

The price did not crash because smaller whales and leveraged long positions absorbed the selling.

But the distribution creates overhead pressure.

Data from Hyperliquid derivatives exchange shows diverging behavior across different WLFI trader cohorts over the past 24 hours. General whale addresses increased their long positions by 68%, showing continued optimism.

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But the top 100 addresses (mega whales) by trading volume reduced long positions significantly.

Smart Money, which tracks positioning by experienced traders, shows a net short position over the past 24 hours, hinting at caution.

This creates a dangerous setup where smaller participants are buying and adding leverage while the largest and most sophisticated players distribute and position defensively.

The rally relied on smaller whale buying and leverage rather than conviction from mega-whales. If consolidation turns into a long squeeze where leveraged longs get forced to sell, the pullback could accelerate beyond the healthy handle formation needed for pattern completion.

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Mid-Term Holders Activate 500 Million Tokens for Exit, Could This Impact the WLFI Price?

The third warning comes from on-chain activity metrics. Spent Coins Age Band tracks coin movement from specific holder cohorts based on how long they held the tokens. The 90-day to 180-day age band represents mid-term holders who acquired WLFI between three and six months ago.

Before February 17, this cohort showed activity of approximately 949,000 tokens moving. Between February 17 and 18, that number exploded to over 500 million tokens.

This represents a 500-times increase in coin activity from mid-term WLFI holders. When holders who sat through months of price action suddenly activate coins en masse, it typically means preparation for exit. They see the 20% rally as their opportunity to take profits after months of waiting. The 500 million tokens moving creates significant potential selling pressure on top of the 1.1 billion already sold by mega-whales and the cautious positioning by Smart Money.

All three risks point toward consolidation. The 8-hour chart RSI divergence predicts it. Mega-whales selling 1.1 billion confirms it. Mid-term holders activating 500 million validates it. The consolidation is healthy and necessary for handle formation if it stays controlled above $0.105 and respects the upsloping neckline. But the market remains weak broadly.

Fibonacci extension to the downside projects $0.090 or lower if the pattern breaks, invalidating the entire setup.

On the upside, breaking above $0.119 reactivates bullish momentum with first resistance at $0.132 before the main pattern target of $0.142. The $0.105 level decides everything. Controlled consolidation above it allows the cup to complete its handle. Breakdown below it turns the distribution into a cascade.