Today, the beginner will answer your questions.
Abnormal market conditions break conventional scripts.
Typically, after a token is announced to be delisted by the exchange, the price often drops by more than 50% initially, followed by a decline or a brief rebound. However, the alpaca token$ALPACA exhibited an abnormal trend: after the delisting announcement on April 24, its price only dropped by 20%, then rebounded rapidly within 10 minutes, soaring by 100% within an hour, with a single-day increase of 400% on the 25th. The unusual fluctuations led many retail investors to follow suit and short the market, but ultimately the shorts faced dual harvesting, with a cumulative liquidation exceeding $4 million from April 24 to 26, far surpassing the liquidation volume of Bitcoin during the same period.
Restoration of the market maker's trading path
Advance layout for accumulation:
Before the delisting announcement (around April 19), the trading volume of the alpaca significantly increased but the price stagnated, suspected that the market maker had prior knowledge of the news and accumulated at low levels.
Using market expectations for reverse harvesting:
Retail investors generally expect that the delisted token will plummet, leading to a surge of short positions (shorts once accounted for 75%).
The market maker takes the opportunity to buy at the bottom, raising prices to create the illusion of a 'flash in the pan', while the exchange shortens the contract funding fee settlement period from 8 hours to 1 hour, and the fee drops to -2%. Shorts must pay high interest hourly (for example, a $100,000 short position requires $2,000/hour), forcing liquidations that exacerbate the upward trend, resulting in a 'double kill' for both longs and shorts.
News manipulation in tandem:
The project side first releases news of 'increased token issuance' causing panic selling among retail investors, allowing the market maker to accumulate at low prices; then announces the cancellation of the increase, reversing the negative news and causing shorts to be liquidated again.
By creating panic and expectation gaps, the market maker achieves dual profits from low-priced spot accumulation and contract fee revenues.
Core harvesting logic
Funding rate mechanism: In the contract market, shorts must pay funding fees to longs to balance positions. The rate soared to -2% and was settled hourly, dramatically increasing the cost for shorts and accelerating forced liquidations.
Liquidity trap: Trades still exist for contracts before delisting, but liquidity gradually dries up, making prices susceptible to manipulation. After the market maker raises prices to entice buyers, retail investors find it difficult to exit before delisting, ultimately leading to a price drop to zero.
Lessons and recommendations
Be cautious with delisted tokens:
Even if delisted tokens rebound, it is essentially a late liquidity 'dead cat bounce', and the risk of participation is extremely high.
Beware of contract fee traps:
In an extremely negative interest rate environment, shorts have to bear both interest and liquidation pressure. Non-professional investors should not operate against the trend.
Timely stop-loss exit:
If holding delisted tokens, it is advisable to sell decisively while the contract has not yet been delisted and liquidity still exists to avoid becoming the last buyer.
Uncovering the message tricks:
The project side often manipulates the market through a combination of 'negative news - accumulation - clarification', requiring rational judgment of the information's authenticity to avoid emotional trading.
Currently, the market is turbulent and unpredictable. The beginner will constantly monitor market trends, seizing every great entry point without missing any opportunities. 👊👊👊
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