ALPACA token's price collapsed by 50% just hours after a bizarre 650% surge triggered by short covering and a surprise token issuance freeze.

The price of ALPACA token dropped by 50% to $0.50 within a few hours on Wednesday, erasing most of its recent gains and highlighting the volatility around Binance delistings

The price of ALPACA token has dropped by 50% to $0.50 within a few hours on Wednesday, erasing most of its recent gains and highlighting the volatility around Binance delistings, before quickly rebounding to $0.70, according to data from Binance.

The drop came after a massive 650% rally, which some attributed to a short squeeze and a temporary halt in new token issuance by Alpaca Finance. The surge also came after the Alpaca Finance team canceled its planned token issuance for a market maker following Binance’s decision to delist the token.

“This morning, our Market Maker had requested more ALPACA from warchest to support today’s high volume, but after feedback from the community, we decided not to mint it.

It’s still unclear what exactly triggered the token’s unexpected sixfold surge and the subsequent plunge amid the negative news of its upcoming delisting from the crypto exchange.

Alpaca Finance is a decentralized finance app on BNB Chain with tens of millions in funds deployed across its V1 and V2 networks, offering borrowing and reward-earning features similar to Ethereum’s Aave. Binance announced on April 24 that it will remove all spot trading pairs for four tokens, including ALPACA, referring to project commitment, development activity, trading volume, and compliance as the reason behind the move.