After the delisting announcement from Binance, the altcoin Alpaca Finance (ALPACA) showed an impressive price increase of four times in the last week.
Such unexpected market behavior sparked active discussions among analysts and traders. Many experts believe this could be an example of market manipulation.
Why ALPACA's price increased
Usually, listing on Binance is considered a positive signal for tokens, often leading to price increases due to enhanced visibility and liquidity. However, recent events show the opposite.
On April 24, Binance announced the delisting of four tokens, including ALPACA. While the value of the other tokens decreased, the price of ALPACA surged sharply. BeInCrypto data showed that the token rose by more than 1,000% in the last seven days.
However, it seems that the momentum has slowed as ALPACA's delisting is set to occur tomorrow, May 2. In the last day, the token's value has dropped by 34.5%. At the time of writing, it was trading at $0.55.
ALPACA price dynamics. Source: BeInCrypto
However, the unusual rise of ALPACA attracted the attention of market observers.
"ALPACA is the worst crypto manipulation I've seen in a while. How can you pump a token from 0.02 to 0.3, then sell it back down to 0.07 and pump it again from 0.07 to 1.27, and then drop it back to 0.3," a user wrote in their message.
Analyst Budhil Vyas called it a 'classic liquidity hunting maneuver.' He explained that large market players, or whales, initially lowered the price by 80%, causing panic and liquidations. Then, two hours before the delisting deadline, they quickly raised the price 15 times.
ALPACA price manipulation. Source: X/BudhilVyas
Vyas believes this was a strategic move to extract liquidity from the market, as whales desperately tried to solidify their positions before the asset was removed from the exchange. He also emphasized that no real accumulation was occurring.
The analyst stated that the price increase was purely tactical. It aimed to exhaust the remaining liquidity in the market.
"This is cryptocurrency in 2025. Be on guard," warned Vyas.
How price manipulations occur
Johannes also provided a detailed analysis of the mechanics behind such price manipulations. In a recent post on social media X (formerly Twitter), he explained that experienced market participants use low liquidity that follows delisting announcements.
The strategy involves dominating a significant portion of the token supply. Traders open large positions in perpetual contracts, anticipating a rise in the token price, as these contracts are more liquid than spot markets.
They then buy the token on the spot market, which increases demand and price. By controlling a large portion of the supply, they minimize selling pressure, allowing the price to spike.
After delisting, positions in perpetual contracts are forced to close with minimal losses, allowing traders to secure significant profits.
DeFi analyst Ignas also commented on this situation. According to him, such schemes have been observed before, especially during delisting announcements on the South Korean exchange Upbit. He noted that delistings attracted no less attention from speculators than new listings in the country.
"The delisting window requires the closing of deposits, so with the limitation on the influx of new tokens, speculators drive up the price to get one last chance before the inevitable drop," he wrote.
Ignas cited Bitcoin Gold (BTG) as an example. The altcoin's price rose by 112% following Upbit's delisting announcement, showing that such price heating behavior is still relevant.