Original Title: "Delisting Doesn't Drop, But Rises? Unveiling the Capital 'Short Squeeze Script' Behind ALPACA"
Original Author: Fairy, ChainCatcher
"Delisting Bomb" Turns into "Wealth Rocket"?
On April 24, Binance announced it would delist the ALPACA token. Normally, one would expect selling, panic, and a crash for ALPACA. However, ALPACA defied expectations, surging over 650% since the announcement.
Is this bizarre rebound a "flash in the pan" for the project, or a prelude laid by capital players? Behind this sudden frenzy, a storm may be brewing…
Image Source: coingecko
Countdown to Delisting Becomes "Short Squeeze" Moment
On April 10, Binance initiated the second round of voting for delisting. A week later, the results revealed ALPACA ranked seventh among 17 candidates, indicating an emerging delisting crisis. On April 24, Binance officially announced it would delist ALPACA on May 2 and liquidate perpetual contracts on April 30. Following the news, ALPACA's price plummeted from $0.0329 to $0.029, with a market cap shrinking to $5 million.
Just when the market generally believed ALPACA would falter, a dramatic scene unfolded: the price surged from $0.029 to $0.0857 within an hour, a staggering increase of 195%. This sudden spike caught short sellers off guard and set the stage for even crazier movements.
On April 25, Alpaca Finance officially stated that due to trading volume exceeding 1 billion tokens, market makers had requested to issue more tokens to maintain liquidity, but the plan was canceled after community opposition. This change undoubtedly dealt another blow to the shorts.
Thus, on April 26, ALPACA's liquidation volume even surpassed Bitcoin, primarily driven by short liquidations. The entire market seemed to transform into a "precise harvesting battle" against short sellers.
Image Source: Coinglass
"Short Squeeze Script"
Regarding ALPACA's rebound, He Yi stated that this might be investors buying the shell to quickly recoup their investments through short-term operations. Based on analyses from community users @LuBtc 888, @0xooorange, and @Mumuyay, we have outlined a complete "short squeeze script":
1. Pre-emptive Positioning Before Delisting
Before the delisting announcement, "whales" may have been aware or sensed anomalies, with suspected accumulation actions around April 19. During this period, ALPACA's trading volume on Binance significantly increased, but the price rise was minimal.
2. Creating Expectation Mismatches, "Bear Trap" Emerges
The market generally expected "delisting = crash," leading retail investors and short-term speculators to collectively bet against it, resulting in a surge of short positions and a spike in ALPACA's open interest. "Whales" took advantage of this to accumulate at low levels, building large long positions, then driving up the spot price, triggering a chain reaction of short liquidations.
3. Rule Changes Accelerate Short Squeeze Rhythm
Binance shortened the funding fee collection period from 8 hours to 1 hour, causing ALPACA's funding rate to briefly drop to -2%. Shorts not only faced liquidation risks but also had to pay high "interest" every hour, forcing them to close positions quickly, leading to accelerated short squeezes and a rapid increase in price.
4. Main Players' Profit Model
Spot Market: Accumulate tokens at low prices during delisting panic, create the illusion of a "flash in the pan," and attract retail investors to buy high before offloading at elevated prices.
Futures Market: Hold massive long positions and continuously collect interest paid by shorts through a negative funding rate mechanism, achieving profits in both directions.
ALPACA's Future Uncertainty
Market opinions on ALPACA's future trajectory are divided. @Mumu_yay believes the delisting announcement will trigger a liquidation mechanism, meaning both long and short positions will be automatically liquidated. In this scenario, "whales" need not worry about finding exit liquidity; they can simply wait at high levels for the liquidation to trigger.
However, crypto KOL Kuang Ren holds a different view. He believes that from a game-theoretic perspective, whales will choose to gradually build long positions at high points, then flip to short, crashing the spot price and ultimately maximizing profits through liquidation. Therefore, his conclusion is that ALPACA's price will plummet.
Additionally, trader @thankUcrypto pointed out that typically, a price surge before delisting is often followed by a price drop. As the platform with the strongest market liquidity, if Binance does not execute a price drop before the May 2 delisting, market makers will have to wait until after the delisting to drop prices on other trading platforms. However, the depth and buying power on other platforms are insufficient, meaning the profits from a price drop will be significantly reduced.
The Storm is Not Over, Future is Uncertain
As the May 2 delisting date approaches, ALPACA's fate remains undecided. Its price trajectory has become a typical microcosm of capital games in the crypto market. The market is always in cycles, and perhaps new "ALPACAs" will continue to emerge in the future, playing out similar scripts in different forms.
In the midst of turbulent waves, rationality remains the only reliable anchor for investors. In the face of short-term emotions and temptations, only by staying clear-headed and keeping one's eyes open can one avoid losing direction in the noise. Stay away from high-risk coins lacking fundamental support, and be wary of the undercurrents of manipulation and control. In navigating the seas, only a prudent helmsman can steer clear of hidden reefs.
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