Author: TechFlow
In recent days, the "Alpaca coin" $ALPACA, which is about to be delisted from Binance, has been active in the market center stage, stirring up hundreds of billions of dollars in total trading volume with a circulation market value of 30 million dollars.
On April 24, Binance announced that it would delist four tokens, including Alpaca Finance ($ALPACA), on May 2.
The news of "delisting from Binance" is usually a huge negative for the project - delisting means reduced liquidity, shrinking trading volume, and token prices often fall sharply or even collapse.
However, after the delisting news was released, $ALPACA experienced around a 30% drop in a short time (calculated based on Binance spot exchange) before rapidly soaring nearly 12 times in three days, from $0.029 to a high of $0.3477. Meanwhile, $ALPACA's open interest (OI) far exceeded its token market value by several times, and the "meat grinder" game of long and short positions around $ALPACA began.
Accelerated Rate Settlement, More Intense Long and Short Battle
Subsequently, Binance adjusted the funding rate rules, shortening the capped rate period to settlement once per hour (up to 2%), further intensifying the long and short battle. Longs not only profited from pulling up the price but could also continuously "eat" high funding rates, with longs "eating and taking" for several days, and $ALPACA's price continuing to be traded at high levels for nearly four days.
Settling at -2% per hour means that under 1x leverage, a short position would lose at least 48% of its principal in a day. Yet, despite such high rates, funds still continue to choose to short.
In this intense battle, some discovered that traders with millions of dollars in follow-up funds have been shorting $ALPACA with high leverage, ultimately liquidating with followers' millions of dollars.
On April 29, Binance raised the $ALPACA contract rate cap to ±4%. For shorts, the further increase in the rate cap would multiply shorting costs, but contrary to expectations, the rule that should have deterred shorts instead saw $ALPACA's price plummet from $0.27 to around $0.067.
No Absolute Trading Rules
As trading volume and attention gradually shift, the $ALPACA story may be coming to an end.
Looking back at this billion-level farce, $ALPACA in these days could be seen as a MEME in some ways - the delisting negative news brought massive attention, fully demonstrating the principle that "being black-famous is still fame" in price fluctuations. With a relatively low circulation market value (less than $4 million at the low point) in the same-level environment, highly controlled chips, and price volatility constantly stimulating players' nerves, even the "alpaca" image seems connected to meme.
Though the image is cute, for users truly participating in the game, these days might only be described as "bloody".
Experiencing negative news causing crazy price pulls, and price smoothly dropping after "short squeeze" news, $ALPACA's complex trend in these days overturned the usual "sell the news" logic and many people's positions.
Clearly, the boundaries between "positive" and "negative" news are gradually blurring, and previous single judgment logic is no longer applicable to the constantly evolving market. Instead, violent market manipulation playing with human nature is prevalent, with continuously refreshing liquidation data gradually occupying the market center. Describing this evolution direction as "savage growth" might be most appropriate.
However, things have two sides. While some feel confused, others feel excited. This farce is not necessarily bad for everyone. For many participants seeking price volatility stimulation and with superior abilities, the alpaca's movement might even be a long-awaited opportunity to make big money.
Some voices suggest that traders using followers' money to short without cost is a hunt for retail investor funds, echoing the movie quote: "Gentlemen's money returned in full, people's money split 30-70". The truth of such claims is hard to determine momentarily, but one can be sure that even if the reality is not so dark, the ultimate winner in this manipulation will not be ordinary users.
Under the premise that corresponding regulatory measures are not yet perfect, $ALPACA may not be the last crazy manipulation in this market.
By the time of writing, $ALPACA's price continues to fluctuate dramatically, and there might be more exciting "performances" before its official delisting.
In the price battle of wind and rain, there's hardly a safe haven for naive participants. Under the siege of attention and liquidity, perhaps watching more and acting less is the most positive EV strategy for retail investors. Those who see big news and abnormal price movements and think "opportunity has arrived" are not just retail investors, but also long-hungry project parties.
