What really happened with the ALPACA short squeeze around Binanceās delisting announcementāand why itās a cautionary tale for anyone betting on a tokenās demise.
In late April 2025, Binance surprised markets by announcing it would delist Alpaca Finance (ALPACA) spot pairs on May 2, 2025 at 03:00 UTC ([ALPACA Token Wild Ride: Short Squeeze, and Looming Delisting]
. Almost immediately, ALPACA plunged nearly 80%, falling from roughly $0.31 to $0.065 between April 27ā29 as panic selling set in ([Alpaca Finance (ALPACA) Sees Sudden Pump Ahead of Binance ...
Yet instead of continuing its rout, ALPACA exploded higherāsurging between 440% and over 2,160% in under 24 hours, depending on the data providerāwith many attributing the move to a classic short squeeze ([Alpaca Finance (ALPACA) Sees Sudden Pump Ahead of Binance ..
, [ALPACA Rallies 440% on Binance Delisting
## Background: The Delisting Notice
On April 24, 2025, Binance cited āevidence of unethical/fraudulent conduct or negligenceā among its reasons for removing ALPACA from its spot markets ([Binance Will Delist ALPACA
Such announcements almost always trigger sharp sell-offs, as traders unwind positions ahead of reduced liquidityābut ALPACA defied that norm.
## The Crash and the Squeeze
- **Capitulation Sell-Off**: By April 29, ALPACA had shed about 80% of its value, hitting lows near $0.065 on spot and futures charts ([Alpaca Finance (ALPACA) Sees Sudden Pump Ahead of Binance ...
- **Explosive Reversal**: Within hours, the price rocketed to highs above $1.47āa gain of over 2,160%āas shorts were forced to cover ([Alpaca Finance (ALPACA) Sees Sudden Pump Ahead of Binance ...
NFT Evening reported a 650% surge followed by a 70% crash in just three hours, underscoring the extreme volatility ([ALPACA Token Wild Ride: Short Squeeze, and Looming Delisting
## Liquidations and Market Impact
- **Total Liquidations**: Coinglass data show more than $51 million in liquidations in a single day, of which roughly $43 million were short positions ([Alpaca Finance (ALPACA) Sees Sudden Pump Ahead of Binance ...
- **Comparisons**: TheStreet noted ALPACAās 24-hour liquidation volume surpassed $55 million, with $45 million from shortsāoutpacing Bitcoinās short wipeouts over the same period ([This asset's astonishing rally and crash in a day stuns the market
- **Futures Data**: Binanceās own blog highlighted $46.6 million in ALPACA perpetual futures liquidations versus $43.3 million for BTC, with the largest individual liquidations on Bybitās ALPACA/USDT market ([What's Happening With The Altcoins That Binance Delisted?]
## Why Did It Happen?
1. **Short Squeeze Dynamics**: Traders had aggressively shorted ALPACA ahead of the delisting, expecting an easy profit when prices fell. The sudden buy-in frenzy to cover shorts created a squeeze that propelled the price upward ([ALPACA Token Wild Ride: Short Squeeze, and Looming Delisting]
[Alpaca Finance (ALPACA) Sees Sudden Pump Ahead of Binance ...
2. **Funding-Rate Tweaks**: On April 29, Binance increased the funding-rate settlement frequency for ALPACA futures and capped rates at Ā±2%. This adjustment made holding long positions more attractive and may have incentivized large levered bets ([ALPACA Rallies 440% on Binance Delisting News -
3. **Issuance Freeze**: Alpaca Finance had planned to mint additional tokens for its market maker, but community pushback led the team to cancel that issuanceāremoving a potential overhang and adding further fuel to the rally ([ALPACA token price suddenly plunges 50% after suspicious 650 ...
## Lessons for Traders
- **Never Underestimate a Squeeze**: Even āobviousā bearish setups can turn into the most punishing short-squeeze scenarios.
- **Beware of Funding-Rate Traps**: Futures funding changes can radically alter the cost of holding positions, impacting market dynamics.
- **Avoid Tokens Near Delisting**: Reduced liquidity makes orderly exits difficult, and any rally before the drop can be deadly for shorts.
> **Key Takeaway**: ALPACAās epic short squeeze shows that markets will always find a way to surpriseāeven when a coin is literally about to be delisted. As a rule of thumb, steer clear of tokens on the chopping block.