The Struggle of the Desolate Old Coins
In the vast starry sky of cryptocurrencies, Alapca finance (Alpaca) was once a shining star. In 2021, it built a leveraged yield farm on the Binance Smart Chain (BSC), enjoying a moment of glory, with a peak total locked value (TVL) reaching 2 billion USD, becoming an undisputed leader in the decentralized finance (DeFi) field. However, good times didn't last long; as the BSC craze gradually faded, the price of Alpaca coins slid down like riding a slide, gradually dimming its brilliance.
This year, when BSC seemed to show signs of revival, I harbored a glimmer of fantasy, buying some Alpaca coins like a moth to a flame, hoping it would regain its former glory. I looked at the pitiful total market cap of only 9 million USD, comparing it with other similar coins, and a strong impulse to gamble surged within me, especially seeing CZ's determination to revive the BSC chain, which made me even more confident in my choice. However, reality was incredibly cruel; the coin price fell for a month, and BSC lost its heat again. I helplessly sold at a loss, thinking this was just an ordinary investment failure, but little did I know, a thrilling hunting drama had just begun.
The Strange Prelude Before Delisting
On March 30, a seemingly ordinary day, it became a turning point in the fate of Alpaca coins. On this day, the Binance team issued a delisting notice to the Alapca project. Prior to this, various abnormal signals had already appeared in the market. The contract and spot trading volume of Alpaca coins suddenly exploded, with contract trading volume reaching 150 million USD and spot trading volume at 12.35 million USD, while its total market cap was only 9 million USD. Such a huge contrast was like a strange light flickering in the dark, signaling that a conspiracy was quietly brewing.
A surge in trading volume by dozens of times, yet the price did not significantly rise, clearly indicating that someone was secretly 'controlling the supply' and 'capital movement.' The manipulators may have already known about the delisting news in advance, like hunters lurking in the shadows, beginning their careful layout. Meanwhile, the poor retail investors remained oblivious, thinking this was just normal market fluctuation, completely unaware that a devastating disaster was about to strike.
The Stunning Reversal After the Delisting Announcement
On April 24, Binance officially announced: Alpaca will be delisted on May 2! The news hit the market like a bombshell, instantly causing a stir. The price of Alpaca coins plummeted from 0.0329 USD to 0.029 USD, as bearish sentiment pervaded the market; retail investors panicked and rushed to sell their holdings, as if the apocalypse had arrived. 'Delisting = Crash' seemed to be the consensus in the market, and everyone unhesitatingly joined the ranks of short sellers.
Yet, who would have thought that all of this was a carefully orchestrated scheme by the manipulators? Just when everyone thought Alpaca coins were doomed, the price soared like a beast breaking free from its cage, skyrocketing from 0.025 USD to 0.333 USD, a staggering 13-fold increase in just 3 days! This reversal left countless retail investors dumbfounded; their wealth turned to dust in an instant, while the manipulators counted their cash behind the scenes with glee.
The Precise Layout of the Hunting Path
The manipulator's operations are like a meticulously arranged script, with each link tightly interconnected and strategically executed.
Information Arbitrage Stage (3.30 - 4.20)
On March 30, when the manipulators grasped the key information regarding the delisting notice, they began their first step of the plan. The main force used block trading to frantically accumulate shares at an extremely low price. At this time, the spot market's average daily trading volume was less than 500,000 USD, with about 6 million actual liquid shares out of the 9 million market cap; the manipulators needed just a million USD to easily control the market. Like a cunning fox, they quietly collected the prey's leverage in the dark. On April 20, the manipulators began testing the market by raising the price by 20% - 30%, to gauge the market's reaction, like throwing a stone to ask the way, observing every move of retail investors.
Pressure Testing Stage (4.20 - 4.24)
On April 20, a 30% trial increase appeared simple but was actually filled with intrigue. It was not only to test the strength of the market's follow-up orders but also to induce shorts to establish positions in the 0.03 - 0.05 USD range. At this time, the funding rate began to occasionally show an abnormal negative value of -0.5%, like dark clouds before a storm, signaling that danger was imminent. On the day of the delisting announcement, April 24, retail investors, like a herd of sheep being driven, frantically added short positions, causing contract open interest (OI) to soar to 62 million USD, unaware that they had already fallen into the trap carefully designed by the manipulators.
Death Spiral Initiated (4.24 - 4.27)
The main force chose to launch an attack 1 hour before the funding rate settlement, like a commander on the battlefield, precisely grasping the timing. They violently pushed up the coin price, creating a contract funding cost of 2% per hour, with a daily average funding rate reaching 48%! What a terrifying number this is; if you short with 2x leverage, the margin for the day will be completely consumed by the rate, leading to a direct liquidation! Two consecutive large bullish candles on April 25-26 finally revealed the true intentions of the manipulators: first to liquidate shorts (short squeeze), then to collect funding rates, and continue to liquidate shorts. At the same time, the manipulators also coordinated their operations with news events. On April 25, the Alapca official announced: 'Due to trading volume exceeding 1 billion, market makers requested an increase in token issuance to maintain liquidity.' This operation instantly triggered community anger and skepticism, and although the plan for increasing issuance was ultimately canceled, many believed that the manipulators intended to increase issuance to hit the exchange spot market, and thus many opened short positions again, resulting in further liquidations. The data on contract positions and total value fluctuated wildly: on April 24, it was 6.2 million, surging to 11 million on April 25, with manipulators continuously buying; on April 26, it soared to 26 million; starting April 27, it began to decline all the way, now maintaining around 18 million.
The Desperate Struggle of Retail Investors
In this brutal hunt, retail investors are like lambs awaiting slaughter, with almost no chance of winning.
High Volatility: The price of Alpaca coins behaves like a runaway wild horse, with 20% - 40% bullish candles often appearing on the 4-hour level, or extreme spikes, with fluctuations reaching 65%, causing both longs and shorts to explode. Even with 2x leverage, one cannot withstand such volatility; retail investors' accounts are mercilessly consumed in the rollercoaster of surges and crashes.
Rate Trap: The funding rate is absurdly high; shorting for just one day can lead to liquidation, and retail investors hardly have time to react. Even if someone realizes they can go long, who dares to easily build a position in the face of imminent delisting risks? It is like an invisible shackle that causes retail investors to lose their last chance amid fear and hesitation.
Information Asymmetry: The manipulators knew about the delisting news in advance, while retail investors were kept in the dark, blindly operating according to market sentiment. While manipulators carefully arranged their strategies in the shadows, retail investors were led around by the nose in plain sight, becoming the victims of this hunting game.
Lagging Indicators: Although funding rates and position data can be viewed, they are often delayed. The 1-hour K-line shows a decline, while the 5-minute and 30-minute lines are rising, leaving retail investors confused by these complex indicators, completely unaware of how to operate, and can only be manipulated by the manipulators.
Reflections After the Hunt
Now, the price of ALPACA has fallen from its peak, with positions starting to decline after April 27, and market enthusiasm gradually cooling. This bloody hunting drama in the cryptocurrency world seems to have temporarily come to a close, but the reflections it leaves us with are far from over.
"Who makes money in this circle? Of course, it’s the exchanges and market makers! The hard-earned money of retail investors is their ATM." This statement reflects the helplessness and indignation of countless retail investors. This battle revealed deep vulnerabilities in the cryptocurrency derivatives market: when the funding rate mechanism combines with micro-capitalization, it creates a financial black hole similar to a 'gravitational singularity', rendering any rational pricing model ineffective in this realm. We can't help but ask, what kind of risk control system do we actually need for derivatives? CEX charges a funding rate of 1680% APY, which is far higher than traditional financial markets; is there no constraint at all?
As retail investors, we must learn lessons from this brutal market. Don’t blindly follow the crowd to short; delisting news is often a trap set by the manipulators, and diving in is like throwing your head into the lion's den; be wary of funding rates; high rates are the manipulators' harvesting machine, and you must calculate costs carefully before using leverage; at the same time, we must recognize the essence of the market and not be deceived by false prosperity.
In the world of cryptocurrencies, risks coexist with opportunities, but more often, there are traps and conspiracies. We are like travelers groping in the dark, needing to stay vigilant at all times to find our own direction on this thorny road. Otherwise, what awaits us will be an endless abyss and painful regret.
