ALPACA Token Surges Following Binance Delisting Announcement

The ALPACA token surged by 2,300% despite impending delisting by Binance, reflecting a shocking 1,100% weekly rise. Binance’s announcement cited low volume and inactivity as reasons for the move. A subsequent short squeeze contributed to ALPACA’s dramatic price spike, leading to higher costs for short sellers. However, concerns linger regarding the sustainability of this recent surge post-delist.

In an unexpected twist, the ALPACA token has skyrocketed by a staggering 2,300% in the wake of Binance’s announcement that it would delist the token along with three others on May 2. Despite the usual market trend where tokens lose value following such news, ALPACA has shown resilience, boasting an incredible rise of nearly 1,100% just within the past week. This has certainly caught the attention of many in the crypto sphere.

The announcement came on April 24, when Binance flagged ALPACA for removal, citing concerns over low trading volume and lack of developer activity. According to the schedule, spot trading pairs linked to ALPACA will be disabled on May 2, with deposits and withdrawals already being curtailed following the news. The market typically reacts negatively to delisting announcements, but ALPACA’s trajectory has been quite the opposite.

After a brief decline immediately following Binance’s news, ALPACA’s price surged from around $0.029 to an astonishing peak of $1.47, marking a 60x increase on certain trading pairs. However, it’s important to note that ALPACA’s current trading value is around $0.53 — down 40% in just 24 hours although still showcasing a remarkable 1,100% increase over the week, as per CoinGecko data.

Analysts believe that the rally was mainly driven by a short squeeze. As prices dipped post-announcement, traders began to anticipate a further fall, opening short positions. The unexpected surge in ALPACA’s price forced these traders to cover their losses, further propelling the price upward. This situation created a ripple effect in the market.

Moreover, Binance’s adjustments to its funding rates also factored heavily into this dynamic. The funding cap was raised significantly, from ±2% to ±4%, while the settlement intervals were altered from four hours to one hour. Such changes inherently increased the costs for short sellers, thus making bearish positions riskier and less appealing.

On the supply side, ALPACA faced a tightening scenario, with the team halting new coin issuance as well as burning roughly 35 million tokens – that’s about 18.6% of the total maximum supply. This put added pressure on the price levels, creating a supply shock of sorts.

Some analysts have raised concerns regarding potential market manipulation, noting that over $50 million in positions were liquidated, including $43 million from short sellers. Speculations arise that strategic movements by larger investors, or “whales,” may have escalated the price increases further, catching many leveraged traders off guard.

The situation has drawn parallels to the notorious Gamestop short squeeze of 2021, where retail traders outsmarted institutional short sellers. However, despite the excitement surrounding ALPACA, questions remain about how sustainable this price surge will be and what implications will follow once Binance completes its delisting process.