Twelvefold increase and decrease right before delisting, retail investors become bait, while manipulators revel.
In recent days, the soon-to-be delisted 'Alpaca Coin' $ALPACA, with a circulating market cap of $30 million, has leveraged a trading volume of $10 billion, becoming the focal point of the market. On April 24, Binance announced that it would delist $ALPACA and three other tokens starting May 2.
'Delisting' is usually a signal for negative news, leading to reduced liquidity and shrinking trading volume, causing prices to drop or even crash. However, after the news, $ALPACA dropped about 30%, and then skyrocketed nearly 46 times within three days, from $0.029 to $1.358. Meanwhile, its open interest (OI) far exceeded its market cap, sparking a 'meat grinder' market for long and short positions.
Rate adjustments intensify the confrontation between longs and shorts.
Binance subsequently adjusted the funding rate rules, shortening the maximum rate cycle to settle once an hour (up to 2%), further igniting the powder keg of long and short battles. Long positions not only profit from pushing the price up but can also continuously 'devour' high fees, earning while consuming over several days, with $ALPACA's price stagnating at a high point for nearly four days.
A fee of -2% per hour means that a 1x leveraged short seller loses at least 48% of their principal in a day. Even facing such high costs, funds continue to flock in to short.
In this intense confrontation, some discovered that certain order-followers were holding millions of dollars in trading funds, heavily leveraging to short $ALPACA, ultimately blowing up along with millions of dollars from the following users.
On April 29, Binance adjusted the maximum contract rate for $ALPACA to ±4%. For short positions, the further increase in fees should have drastically raised the cost of shorting, enough to scare off short sellers. However, after this seemingly negative rule was introduced, the price of $ALPACA 'went against logic' and plummeted from $0.27 to around $0.067.
As trading volume and attention shift, the story of $ALPACA may come to an end.
In this trillion-level farce, $ALPACA can be regarded as a Meme coin to some extent: the delisting news has drawn attention, and the saying 'black is also red' has been amplified during price fluctuations. Low circulating market cap (below $4 million at its lowest), highly controlled chips, and extreme volatility that excites people's spirits, even the 'alpaca' image fits the characteristics of a Meme.
However, this 'cute' alpaca is extremely 'bloody' for players. Negative news has led to price drops, and the 'short squeeze' news has triggered a crash, overturning the 'sell on bad news' logic of $ALPACA and disrupting countless positions. The boundaries between good and bad news are blurred, traditional judgments fail, replaced by violent manipulation of human nature, with liquidation data being frequently refreshed.
This 'wild growth' has left some people confused and others excited. For those chasing volatility, this is a long-awaited opportunity for huge profits. However, some voices point out that the order-followers' cost-free shorting is a predation on retail investors' funds, just like a movie line: 'The money of the gentry is returned in full, while the money of the common people is split three to seven.' The truth is hard to discern, but the winners are certainly not ordinary users.
Before regulatory improvements, $ALPACA may not be the last crazy event. As of the time of writing, the price is still highly volatile, and there may be more 'performances' before the delisting. In this tumultuous game, retail investors find it hard to establish a foothold. Faced with abnormal trends, it's better to say it's a bait from the project side rather than an 'opportunity'. Watching less and acting more may be the best solution for retail investors.
