Market Analysts Discuss Possible Market Manipulation Behind ALPACA's Massive 1,000% Price Increase
In a shocking turn of events, Alpaca Finance (ALPACA) has witnessed an unprecedented rally of over 1,000% in the past week, despite Binance's announcement to delist the token. This unexpected development has sparked heated discussions among analysts and traders, leading many to suspect possible market manipulation.
Traditionally, a Binance listing serves as a bullish signal, driving token prices up due to increased visibility and liquidity. However, recent trends indicate a reversal in this pattern. On April 24, Binance announced the delisting of four tokens, including ALPACA. Interestingly, while the value of all other tokens declined, ALPACA's price skyrocketed. Data from BeInCrypto shows that the token appreciated by over 1,000% over the past seven days.
However, the momentum seems to have slowed down as ALPACA nears its delisting date on May 2. Over the past day, its value has dipped by 34.5%, trading at $0.55 at the time of writing. Despite the recent dip, the unusual surge in ALPACA's price has caught the attention of market watchers.
"Alpaca Finance is the most blatant crypto manipulation I've seen in a while. How do you pump a token from 0.02 to 0.3, then sell it back to 0.07 and pump it from 0.07 to 1.27, then back down to 0.3?" a user commented.
Analyst Budhil Vyas explained this as a "textbook liquidity hunting." He suggested that large market players (whales) drove the initial price down by 80%, triggering panic and liquidations. Just before the 2-hour delisting deadline, these whales rapidly pumped the price by 15X. Vyas believes this was a strategic move to extract liquidity from the market, as these whales were desperate to secure positions before the asset was removed from the exchange, and no real accumulation was taking place.
Meanwhile, Johannes provided a detailed breakdown of the mechanics behind such price manipulations. He explained that sophisticated parties exploit the low liquidity that follows delisting announcements. The strategy involves dominating a large portion of the token's supply through large positions in perpetual futures, betting on the token's price rising, as these contracts are more liquid than spot markets. They then buy the token on the spot market, increasing demand and price. With most of the supply controlled, there is little selling pressure, allowing the price to spike.
Once the delisting occurs, the perpetual futures positions are forced to close with minimal slippage, enabling traders to lock in substantial profits.
This pattern has been observed before, especially during delisting announcements on the South Korean exchange Upbit. Ignas, a DeFi analyst, noted that delistings used to receive similar, if not more, attention from speculators as new listings in the country. He pointed to the example of Bitcoin Gold (BTG), whose price increased by 112% after Upbit announced its delisting, showing that this price-pumping behavior still occurs.
These cases have sparked debate about whether the "pump → delist" pattern is becoming a new trend. As the crypto market matures, these manipulative practices highlight the urgent need for research, vigilance, and stronger regulatory oversight to protect investors from predatory strategies.
- Amidst the shocking 1,000% rally of Alpaca Finance (ALPACA) in a week, discussions about possible market manipulation have intensified among analysts and traders.
- Binance's delisting of ALPACA, contrary to tradition, could potentially signal a reversal in the trend of increased visibility and liquidity driving token prices up.
- While Binance delisted four tokens on April 24, including ALPACA, only ALPACA's price skyrocketed, suggesting a counterintuitive market behavior.
- Data from BeInCrypto indicates that ALPACA has appreciated by over 1,000% in the past seven days, contradicting the general trend of delisted tokens.
- Despite a recent dip, ALPACA's price surge has piqued the interest of market watchers, with some suspecting market manipulation.
- Analyst Budhil Vyas described the rally in ALPACA as a "textbook liquidity hunting," suggesting that large market players (whales) pumped the price to extract liquidity from the market.
- Johannes provided an in-depth explanation of the mechanics behind such price manipulations, stating that sophisticated parties exploit low liquidity after delisting announcements to dominate a large portion of the token's supply.
- The strategy involves using large positions in perpetual futures to bet on the token's price rising, as these contracts are more liquid than spot markets.
- With most of the supply controlled, these traders buy the token on the spot market, causing the price to spike, as there is little selling pressure.
- This pattern, observed particularly during delisting announcements on the South Korean exchange Upbit, has sparked debate about whether the "pump → delist" pattern is becoming a new trend in the crypto market, highlighting the urgent need for stronger regulatory oversight to protect investors from predatory strategies.
