Short selling coins and remove them without any brainstormingly? The dealer's counterattack stages a polar reversal

Author: Luke, Mars Finance

On this day, Binance announced that it would remove four tokens including ALPACA on May 2, citing that these tokens failed to meet the platform's standards in terms of transaction liquidity, cybersecurity and community transparency. As soon as the news came out, the price of ALPACA fell, hitting a low of 0.029 USDT, with a drop of 10.38% in 15 minutes. However, the plot did not go as expected - just a few hours later, the price of ALPACA soared to 0.085 USDT, up 93.16% in one hour. Behind this roller coaster market, is it the failure of "short selling and removing coins without brainstorming money" or the carefully planned counterattack of the dealer?

Announcement for the removal of the shelves: The fuse of panic

As the world's largest cryptocurrency exchange, Binance every decision to take it off the shelves is like dropping a bombshell in the market. It is not entirely surprising that ALPACA is listed on the shelves this time. As early as April 10-16, ALPACA ranked sixth on the list of high-risk tokens with a 6.3% "desold ticket". This vote, like giving the market a pre-emptive shot, suggests that ALPACA may face problems of insufficient liquidity or weak community support.

The removal announcement on April 24 officially sparked market sentiment. ALPACA price quickly fell from 0.0329 USDT to 0.029 USDT, and its market value shrank to about $5.9 million. On the X platform, traders were wailing, and some lamented: "The coins removed are indeed poisons, and they can't even run away!" This kind of panic selling is not uncommon - the removal means losing Binance's huge trading traffic, and the decline in liquidity is almost a foregone conclusion. What's more, ALPACA, as a low-market token (about 6 million US dollars), is itself susceptible to severely influenced by market sentiment.

But the story has just begun here. Just when everyone thought ALPACA would continue to slide into the abyss, the price drew an eye-catching upward curve. Within 1 hour, ALPACA soared from 0.029 USDT to 0.075 USDT, an increase of 87.16%. Bitget market data shows that the price once hit USDT, and the 24-hour trading volume soared to USD 70.77 million, equivalent to 12 times its market value. This wave of rebound came too quickly, like a carefully arranged drama, which made people wonder: Is this a fanatical bottom-buying by retail investors or a counterattack by the dealer?

Speculators’ Carnival: The Charm of Low Market Cap Tokens

To understand this price storm, we need to first look at the "background color" of ALPACA. ALPACA is the native token of Alpaca Finance, a DeFi protocol that allows users to farm leveraged income. In March 2021, ALPACA went online in a "fair launch" (no pre-sales, no investors, no pre-mining) model, and was once regarded as a community-driven DeFi star. However, the good times did not last long, with ALPACA price falling from an all-time high of USDT to 0.04887 USDT (CoinMarketCap data), a drop of 99.43%. With low market value, high volatility, coupled with the support of futures trading, ALPACA has become a paradise for speculators.

After the news of the removal was announced, ALPACA's low price (0.029 USDT) was like a piece of cheese that exuded an attractive aroma, attracting countless speculators to flock. On the X platform, a user named @BroLeonAus bluntly said: "The market value of 6 million is too poor, the risk-return ratio of short sellers is too bad, I will be long decisively!" His logic is very simple: ALPACA's market value is so low that there is almost no room for decline, and high trading volume (24-hour trading volume/market value ratio reaches 961.13%) means that the market activity is extremely high, and a slight turmoil can cause huge waves. Another user @bigbottle44 pointed out that ALPACA's futures holdings (about 2 million US dollars) account for a very high proportion of market value, which may be a signal of hot money or institutional intervention.

This speculative logic is not new in the crypto market. Low-market tokens are often the operational targets of dealers or large investors due to their small circulation and sensitive price. The panic selling caused by the news of the removal of the shelves has pushed the ALPACA price to a low point, just providing an excellent opportunity for bottom-buyers. The high leverage attribute of the futures market further amplifies the amplitude of price fluctuations. It can be said that this wave of 87.16% surge is not only a carnival for retail investors to buy at the bottom, but also a masterpiece of the dealer pulling the market with the trend.

The dealer is making a big splash? Or market FOMO?

So, is this surge of spontaneous market behavior or the careful layout of the dealer? Let's analyze several possibilities.

Possibility 1: Market overshoot and natural rebound

The panic selling caused by the news of the removal may lead to a serious underestimation of ALPACA prices. The price of USDT, equivalent to a market value of only over $5 million, is indeed too cheap for a DeFi project that still has an active community and transaction volume. Some traders may think that the market has overreacted to the removal of the shelves, so they quickly bought the bottom and pushed the price to rebound. This "overshoot-rebound" model is common in the crypto market, especially among low-cap tokens.

Possibility 2: The dealer breaks the ball and strikes back

Another possibility is that dealers or big players take advantage of the panic of the news of the removal of the shelves to deliberately create lows, and then raise the price through large purchases. ALPACA's 24-hour trading volume is as high as $70.77 million, far exceeding its market capitalization, indicating that a large amount of funds have poured in in a short period of time. On the X platform, some users speculated that there might be a "main" operation behind this wave of pull-up, with the purpose of squeezing short sellers with high leverage. ALPACA supports futures trading on Binance, and its holdings account for a high proportion of market value. Once the price rises rapidly, the shorts are forced to close their positions, further pushing up the price, forming a "short squeeze" effect.

Possibility 3: Retail FOMO Driven

Retail investors in the crypto market are often easily driven by FOMO sentiment. Discussions on social media quickly heated up when ALPACA prices began to rebound from 0.029 USDT. Coinbase data shows that 32.18% of X posts are bullish on ALPACA, while CoinGecko shows that 75% of community members are bullish. Retail investors see prices rising rapidly and may flock in to push up prices. This FOMO-driven market is usually accompanied by high trading volume, but it is also prone to pullbacks in a short period of time.

Overall, this surge is likely to be the result of a "dance between multiple parties": the market overshoot provides opportunities for bottom-buyers, the dealer or big investors take the opportunity to pull the market, and the FOMO sentiment of retail investors adds a lot of fire to the market. No matter who is the driving force behind it, this price storm at ALPACA is a textbook-level crypto market case.

Community Diversification: The Confrontation between Optimists and

Prudentists

The surge in ALPACA not only ignited the enthusiasm of traders, but also sparked heated debate in the community. On the X platform, optimists and prudentists form a sharp opposition.

Optimist: Low market value is opportunity

For optimists, ALPACA's low market cap and high trading volume are the biggest attraction. They believe that even if Binance is removed from the shelves, ALPACA can still trade on other exchanges such as Gate.io and MEXC, and liquidity will not be completely exhausted. What's more, some users regard ALPACA as a potential stock of "double coin" on the grounds that its market value is low and its volatility is high, and it is suitable for short-term speculation. A user wrote on X: "The market value of 6 million and the trading volume is 70 million. Isn't this the prelude to the dealer pulling the market? Stud!"

Caution: The shadows are hard to disappear

The cautionary one is skeptical of the prospects of ALPACA. As ALPACA's most active trading platform, its decision to remove the shelves may lead to a sharp drop in trading volume, thereby increasing bid-ask spreads and liquidity risks. A user commented on X: "Who will trade ALPACA on a small exchange after it is removed? The price will collapse sooner or later." In addition, the lack of activity in community communication and project development has also caused some investors to question its long-term value.

The discussion on Reddit is relatively deserted, with only a few posts mentioning Binance’s community voting and the risk of ALPACA’s removal. In contrast, the X platform is more real-time, reflecting the rapid changes in market sentiment. Whether optimistic or cautious, the community’s consensus is that the future of ALPACA is full of uncertainty.

Future Outlook: Where does ALPACA go?

Although this price storm is exciting, the future of ALPACA is still full of variables. In the short term, high trading volume and speculative enthusiasm may continue to drive price volatility, but the long-term outlook depends on the following factors:

Support from other exchanges: ALPACA currently has trading pairs on platforms such as Gate.io, MEXC. If these exchanges can attract more trading volume, the liquidity crisis in ALPACA may be alleviated.

Project Team’s Efforts: The ALPACA team needs to strengthen community communication and publish a clear development roadmap to reshape investor confidence.

DeFi Market Trends: As a DeFi protocol, the performance of ALPACA is closely related to the overall trend of the DeFi sector. If the DeFi market rebounds, ALPACA may usher in new opportunities.

Regulatory and market risks: Binance's decision to take down the shelves may trigger other exchanges to follow suit, and investors need to be wary of liquidity risks and high volatility.

The price storm of ALPACA is a typical crypto market game. The news of the removal of the shelves ignited panic, speculators took advantage of the low to buy at the bottom, the dealer or big investors took advantage of the trend, and the FOMO sentiment of retail investors added fuel to the market. All of this constitutes the unique drama of the crypto market. Some people make a lot of money by buying at the bottom of 0.029 USDT, while others chase high and get trapped at the 0.075 USDT. Whether you are an optimistic or a cautious person, this storm reminds us that the crypto market will never lack opportunities or traps.

Short selling coins and remove them without any brainstormingly? Maybe it works at some point, but when the dealer breaks out and fights back, the bears may be crushed instantly. The story of ALPACA continues, and the next price storm, perhaps, is already brewing.