Delisted by Binance but experiencing a big pump: The extreme manipulation of the market maker for Alpaca Coin.

Jessy, Golden Finance

According to common sense, a token being delisted by an exchange is a significant negative news.

However, this pattern was not perfectly replicated with the ALPACA token, which was delisted from Binance on May 2nd. Initially, when the news of ALPACA's delisting came on April 24th, it did experience a brief decline, but then its price soared more than tenfold within the following three days.

By April 30, the price had increased nearly 50 times since the announcement of its delisting. According to data from Coinglass, the liquidation amount of ALPACA tokens in the past 24 hours reached 50 million USD, surpassing that of Bitcoin.

Behind such an absurd phenomenon lies merely a perfect harvest by the ALPACA dealers.

The irrational manipulation by the big players, the lament of retail investors

On April 24, about five days before Binance announced the delisting of ALPACA, the trading volume of ALPACA tokens suddenly increased, and the price nearly doubled at its peak. At this time, it can be inferred that it was the market maker who had been accumulating positions at low levels before the delisting news was released.

However, when the news of the delisting was officially released on April 24, retail investors expected the price to plummet, with the long-short ratio reaching 1:4 at that time. Contrary to the expectations of retail investors, the token's price did not continue to decline but instead began to rise after a brief drop of 30%.

The exchange also plays an important role in this, as Binance has shortened the settlement period for contract funding rates from 8 hours to 1 hour. When the rate drops to -2%, it indicates that the airdrop needs to pay a high rate to short, and the high rates also lead to short sellers closing their positions, causing the price of the tokens to rise accordingly.

However, the changes in rates do not work all the time above the fluctuations in the price of this token on ALPACA.

ALPACA is always counterintuitive, and it is precisely because of this counterintuitiveness that many traders make mistakes when trading according to "rules." For example, on April 29, Binance raised the ALPACA contract fee rate cap to ±4%. Normally, an increase in the rate cap and a rise in short rates would deter shorts, and the token's price should go up; however, its price did not rise as it did on April 24, but instead experienced a drop, directly losing 3/4.

By April 30th, this game of the market makers, which had been twisted back and forth, reached its peak, with the highest price within 24 hours being 20 times higher than the lowest price. At 5 PM on April 30th, Binance delisted the ALPACA contract, causing ALPACA to drop over 60% from its peak, after which it began to rise again.

In the past 24 hours, the largest liquidation order for ALPACA across the entire network occurred on Bybit, amounting to $3.98 million. The liquidation volume of ALPACA contracts also topped the list.

Summary:

The most intriguing aspect of this event is that the coordination between the big players and the news was too perfect, leaving retail investors confused. Additionally, the exchange itself has somewhat become an accomplice in this situation.

For example, the adjustment of contract fees by Binance this time seemed to be aimed at maintaining market stability, but it was exploited by traders. On April 29, Binance raised the ALPACA fee to ±4%, which was originally intended to deter short sellers, but instead, the price fell, and the open interest increased.

The market makers undoubtedly took advantage of this news, catching the retail investors off guard. This also indicates that the formulation and adjustment of exchange rules need to be more cautious, fully considering various possible situations to avoid giving market manipulators an opportunity.

This incident has also exposed that retail investors are merely playthings that can be harvested by the big players at any time; wanting to dance with the big players means dancing on the edge of a knife.