ALPACA's 'sinful' life continues, but the liquidation players need a break.

  • Written by: Deep Tide TechFlow

In recent days, the soon-to-be-delist 'Alpaca Coin' $ALPACA has been active at the center of the market stage, stirring up over $10 billion in total trading volume with a circulating market capitalization of $30 million.

On April 24, Binance announced that it would delist four tokens, including Alpaca Finance ($ALPACA), on May 2.

The news of 'delisting from Binance' is usually a huge negative for a project—delisting means reduced liquidity and shrinking trading volume, and token prices often drop sharply or even stagnate.

However, $ALPACA clearly did not follow this script. After the delisting news was released, $ALPACA experienced a decline of about 30% in a short period (calculated based on Binance exchange spot trading), but then surged nearly 12 times within three days, soaring from $0.029 to a peak of $0.3477. Meanwhile, the open interest (OI) for $ALPACA far exceeded its token market value several times.

The long-short game revolving around $ALPACA has begun.

Accelerated rate settlement, more intense long-short competition.

One day after the delisting announcement, on April 25, Binance adjusted the contract funding rate settlement rules for $ALPACA, shortening the cap rate period to settle once every hour (maximum ±2%). This further intensified the fierce competition between bulls and bears.

Bulls not only profit from price surges but also continuously 'eat' high funding rates, causing the price of $ALPACA to remain in high-level competition for nearly four days.

But short sellers are not so fortunate. With a settlement rate of -2% once every hour, it means that under the premise of 1x leverage, short sellers will lose at least 48% of their principal after holding a short position for a day. Even with such a high rate, funds choosing to short still continue to pour in.

Under the intense competition, some have noticed something unusual. Some lead traders with million-dollar following positions have been shorting $ALPACA at high leverage, ultimately leading to a liquidation of millions of dollars in funds together with their following users.

On April 29, Binance raised the contract fee cap for $ALPACA to ±4%. For short sellers, the increased cap will double their shorting costs. However, once the rules meant to deter short sellers were announced, the price of $ALPACA inexplicably plummeted from $0.27 to around $0.067.

$ALPACA's script is unpredictable; the original trading rules keep failing, and the only constant seems to be change.

There are no absolute trading rules.

Reflecting on this billion-level farce, the past few days of $ALPACA is indeed a kind of Meme—bringing a lot of attention due to the negative delisting, allowing the principle of 'black or red is still red' to be fully realized in price fluctuations. At the same time, some characteristics of Alpaca—relatively low circulating market capitalization within the same-level environment (with a low point of less than $4 million), heavily controlled chips, and wide price fluctuations that continuously stimulate players' nerves, as well as the image itself, can be linked to Meme.

The image may be cute, but for users truly participating in this game, these past few days can only be described as 'bloody.'

With negative news leading to a crazy price surge and the emergence of 'short-squeeze' news resulting in smooth declines, the complex price movements of $ALPACA these past few days have overturned the usual 'sell the news' logic and disrupted many people's positions.

There are voices suggesting that the actions of leading traders using the funds of following users to short without regard for costs is a hunt on retail capital, as expressed in the movie title: 'The gentry's money is returned in full, the common people's money is split three to seven.' The truth of such statements is hard to judge at the moment, but one thing is certain: even if the reality is not so dark, the ultimate winners in this manipulation will not be ordinary users.

However, things have dual aspects; while some feel confused, others feel excited. For many participants who seek stimulation from price volatility and possess superior abilities, the movements of Alpaca present an opportunity to make significant profits after a long time.

Clearly, the boundary between 'bullish' and 'bearish' has become increasingly blurred; the previously singular judgment logic is gradually becoming unsuitable for an evolving market. In its place, brutal manipulation of human nature is rampant, and the continuously refreshed liquidation data gradually occupies the center of the market. Describing this evolutionary direction as 'barbaric growth' might be quite appropriate.

Under the premise that relevant regulatory measures are not yet in place, $ALPACA will not be the last instance of crazy manipulation in this market.

As of the completion of this writing, the price of $ALPACA has experienced a sharp rebound after falling; perhaps there will be more exciting 'performances' before the official delisting.

In the turbulent price game, it is difficult for naive participants to have their own territory. Under the hunting of attention and liquidity, perhaps the best strategy for retail investors is to watch less and act more. After all, when noticing big news and abnormal price trends, it's not just retail investors who feel that 'the opportunity has arrived,' but also the long-hungry project teams.

This article is reprinted with permission from Deep Tide TechFlow.

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