$ALPACA Surges 800% Then Crashes 50% Amid Binance Delisting Drama

Binance’s decision to delist Alpaca Finance’s $ALPACA token has unleashed a rollercoaster of price action, with the token surging 800% in days before tumbling over 50% by April 28. What started as a standard exchange move has spiraled into a dramatic showcase of speculation, leveraged trading, and market dynamics.

On April 24, 2025, Binance announced it would delist $ALPACA, along with three other tokens, effective May 2, citing factors like trading volume and project development in its review process.

Typically, such news triggers a price drop as liquidity dries up, but $ALPACA defied expectations. Between April 24 and April 26, the token surged from $0.0334 to a peak of $0.31—an over 800% gain—according to CoinGecko data.

The surge was fueled by a wave of attention following the announcement. Alpaca Finance disclosed on April 25 that market makers had requested more $ALPACA from its Warchest to handle increased trading volume, though the team, after community input, opted not to mint additional tokens.

This decision coincided with heightened activity on Binance’s ALPACAUSDT perpetual futures contract, where traders—many betting on a price drop—piled into short positions. Instead, the price climbed, triggering liquidations and amplifying the rally. According to Coinglass data, short liquidations for Alpaca hit $13.32 million in April 25 and $13.12 million in April 26.

The pump’s mechanics trace back to Binance’s futures market. Launched in August 2024 with up to 75x leverage, the ALPACAUSDT contract saw a spike in open interest as the delisting news broke.

Analysts point that Binance’s ALPACAUSDT perpetual futures contract, with up to 10x leverage, may served as the key driver. The delisting buzz drew heavy short interest, inflating futures open interest. Whales and market makers, capitalizing on this, are believed to have opened large long positions while simultaneously pumping the spot market. With funding rates hitting 2% per hour—paid by shorts to longs—this created a feedback loop: rising spot prices widened the futures-spot gap, generating funds for further spot buying. With the delisting set to auto-settle all futures positions on May 2, longs could hold without needing an exit, banking on the settlement price.

The rally unraveled on April 27. On April 27, Binance updated the ALPACAUSDT contract’s leverage and margin tiers, effective April 28 at 06:30 UTC, reducing the maximum leverage from 6x (10x before, adjusted) to 5x and adjusting margin requirements. By afternoon, $ALPACA had crashed around 50%, falling from $0.301 to $0.21, according to Coingecko. The leverage adjustment, though modest, rattled an already volatile market. Analysts linked the timing of the drop to the update, suggesting it gave large players a reason to pull back.

Alpaca Finance, a leveraged yield farming protocol on BNB Chain since 2021, has seen its token’s value erode from a $8.56 peak in March 2021 to $0.0278 before this drama. The delisting pump briefly revived interest, but the crash underscores its fragility. As $ALPACA nears its May 2 fate, this episode highlights the wild swings small-cap tokens face in the crypto spotlight. For traders, the takeaway might be obvious: stay away from high-risk tokens lacking fundamental support and watch out for the hidden forces of market manipulation.