On April 24, 2025, Alpaca Finance (ALPACA) attracted widespread market attention after being included in Binance's delisting list. Typically, delisted tokens experience a cliff-like drop, often falling by as much as 50%, followed by several days of gradual decline, and ultimately extracting remaining value through several rounds of surges. However, ALPACA's performance completely overturned this convention. After Binance's delisting announcement, ALPACA dropped less than 20% in just ten minutes, far below market expectations.
This abnormal performance led many investors who considered themselves 'smart' to see an opportunity: a drop of only 20%, with the contract market available for operation, light shorting seemed like a sure way to profit.
However, the subsequent market trend caught these shorts off guard. Starting at 12:10 PM that day, ALPACA's price quickly rebounded, rising over 100% within an hour, followed by a period of extreme volatility where the battle between retail long and short positions became the stage for the main force to harvest profits.
Market data reveals the 'delisting frenzy'.
On that day, the amount of short positions liquidated reached $4.4609 million, while long positions liquidated amounted to $1.6522 million. In the following days, the scale of liquidations continued to expand:
April 25: Short positions liquidated for $13.3249 million, long positions liquidated for $2.2671 million;
April 26: Short positions liquidated for $13.1199 million, long positions liquidated for $1.8753 million (in a certain 4 hours, the liquidation amount even exceeded Bitcoin);
April 27: Short positions liquidated for $5.0061 million, long positions liquidated for $2.6325 million.
Bybit became the hardest hit by this incident. In response to extreme market conditions, major exchanges shortened the funding rate settlement period for ALPACA contracts from 8 hours to 1 hour, with rates dropping as low as -2%. Shorts were forced to pay high fees every hour, leaving them no breathing room. Was this 'delisting frenzy' a market failure, or a carefully orchestrated plan by the main force and the project team? Below, we will delve into the reasons behind ALPACA's extreme price fluctuations, reveal the nature of the project's controversial operations, and discuss its long-term impact on retail investors and the market.
The behind-the-scenes driver of abnormal trends: main force operations and retail investor misjudgments.
The root of ALPACA's abnormal performance lies in the catalyst of Binance's delisting announcement and the precise manipulation by the main force. Typically, delisting leads to a halving of the token price, with investors selling off their holdings, and the main force then harvesting profits through price surges and crashes. However, ALPACA only dropped 20%, leading many to mistakenly believe it was 'resilient' and choose to short. Unbeknownst to them, ALPACA has a small market cap and its circulation can be easily manipulated. The main force had already accumulated positions in advance, using high leverage in the contract market to quickly push up the price, directly 'slaughtering' the shorts. Subsequently, retail investors' erroneous decisions to short when prices rise and chase longs when prices fall became the perfect script for the main force's harvesting.
The project's controversial operations: issuance threats and a crisis of trust.
On April 25, ALPACA's single-day increase reached as high as 400%. Just as market sentiment was soaring, the project team threw out a 'sneaky operation'—announcing a plan to issue more tokens. This was seen as a tactic by the project team to create panic using market euphoria, luring retail investors to sell off in order for the main force to accumulate at a low price. As expected, the issuance news caused a brief price drop, followed by panic selling from retail investors. The subsequent strong rebound in price indicated that the main force had already stockpiled enough tokens, taking the opportunity to push prices higher and harvest again.
Capital rate tricks: how retail investors get 'cut' clean.
ALPACA's funding rate mechanism became a 'weapon' for the main force to harvest retail investors. In simple terms, the funding rate is the fee paid by both sides in the contract market to balance positions. When short positions dominate, the shorts have to pay fees to the longs. In the ALPACA incident, exchanges shortened the settlement period to 1 hour, with rates reaching -2%, causing shorts to be 'cut' every hour with no chance to retaliate.
Specific operational process:
April 24: Binance's delisting announcement was released, ALPACA only dropped 20%, retail investors misjudged the market, and the short position ratio quickly rose to 75%.
The main force drove the price up: the price doubled within an hour, and shorts not only faced liquidation but also had to pay high funding rates. For example, with a $100,000 short position, $2,000 had to be paid every hour, resulting in daily losses of up to $48,000.
Double blow: the main force controls the spot market to push prices up, while shorts bleed due to both liquidation and fees, unable to recover.
This design of settling every hour with rates as high as -2% left retail investors no reaction time, rapidly draining their funds. The main force profited handsomely from liquidation gains and funding rate income, while the exchanges' actions to shorten the settlement period raise suspicions of collusion with the main force and the project team.
The main force's operation textbook and the blood and tears lessons of retail investors.
This 'delisting frenzy' is a classic case of main force operations. The main force acted as the director, while retail investors became actors constrained by the script. After the price surged, some questioned: 'How can there be such a crazy surge after delisting?' The response from Binance co-founder He Yi may hint at some market logic, but specific details remain unclear. In this event, the main force not only harvested retail investors but also solidified its position in the realm of market manipulation. The losses of retail investors became the stepping stones to their success, and the ALPACA contract will be delisted on April 30, bringing this performance to an end.
Advice for investors holding spot:
Whether you bought in at a low or were trapped at a high, it is recommended to exit as soon as possible. After the event, ALPACA's price may return to its initial level (e.g., $0.038). As one investor lamented: 'These days felt like a dream; the price fluctuated multiple times from $0.038, yet in the end, it was still $0.038, but my funds are gone.'
Far-reaching impacts and lessons.
The ALPACA incident reveals the harsh realities of the crypto market:
Low market cap tokens are easily manipulated: small circulation makes it easy for the main force to control the market.
High leverage contracts are a graveyard for retail investors: extreme volatility and high fees leave retail investors nowhere to escape.
Transparency from project teams is crucial: issuance controversies severely damage trust.
Advice for retail investors:
When encountering delisted tokens, do not blindly short or chase long positions; beware of the main force's tricks.
For ALPACA to regain trust, it needs to disclose its economic model and cease controversial operations like issuance, or it risks losing its position in the DeFi space.
Retail investors should remain cautious to avoid becoming 'leeks' for the main force.
