ALPACA Token Soared by 650% After Binance Delisting Announcement

In a surprising turn of events, the ALPACA token surged by more than 650% within just a few days following Binance's announcement that it would delist the asset.

Binance announced on April 24 that it would delist all spot trading pairs involving the ALPACA token by May 2.

Usually, such announcements from major exchanges spark panic selling, leading to a decrease in the token's price. However, in a surprising turn of events, ALPACA experienced an unexpected surge of more than 650% within just a few days following Binance's announcement.

This rally was driven by several factors, including a short squeeze and the temporary suspension of new token issuance, which defied typical market expectations.

What Happened to ALPACA Price Today?

Data from TradingView indicates that ALPACA experienced a significant surge from $0.029 to a peak of over $0.21 within 48 hours.

The trading volume also spiked, signaling an influx of investor participation.

Yet, by April 29, the trend reversed abruptly. In just three hours, ALPACA plummeted by 70%. It fell from $0.24 to a low of $0.066, nearly wiping out most of its previous gains and sparking concerns about the sustainability of the rally.

The triple-digit surge in ALPACA can be largely attributed to a “short squeeze.” After Binance announced the delisting of ALPACA, many traders opened short positions, anticipating a drop in the token's price.

However, when the price moved unexpectedly upward, those short positions were forced to close, leading traders to buy back ALPACA tokens to avoid further losses. This, in turn, amplified the buying pressure and pushed prices even higher.

Another major factor was Alpaca Finance's decision to suspend its plan to issue additional ALPACA tokens. According to the team, the project had originally intended to provide more liquidity to market makers.

However, the Alpaca Finance team scrapped the plan after receiving negative community feedback. This indirectly tightened the token supply and further fueled upward price momentum.

Lessons from the VOXEL Case

The case of ALPACA is not entirely unique. Previously, the VOXEL token also experienced a sharp pump immediately after news of its delisting broke.

However, the situation with VOXEL was more complex, as Bitget discovered a group of actors manipulating the market and illegally profiting over $20 million.

In response, Bitget issued eight legal notices, froze the assets of related accounts, and pledged to redistribute 100% of the recovered funds to users via airdrops.

While ALPACA has recently shown impressive short-term growth, the risks for investors remain high. The delisting will significantly reduce ALPACA's liquidity in the coming period, rendering it more difficult for traders to buy and sell the token.

Binance will proceed with delisting the trading pairs ALPACA/USDT, ALPACA/BTC, ALPACA/BNB, and ALPACA/BUSD starting at 03:00 UTC on May 2.