Alpaca Finance (ALPACA) stunned the crypto market with an unexpected surge, when the token price skyrocketed from $0.03 to a peak of $0.217 in just two days, a jaw-dropping 7x rally. This happened right after Binance announced on April 24th it would delist ALPACA on May 2nd. 

As one would expect, ALPACA initially nosedived, shedding 20% of its value within hours as traders rushed to exit.

How a “Delisting Dump” Turned into a Massive Pump

However, the expected dump turned into a massive pump. This counterintuitive rally was likely driven by a classic short squeeze. ALPACA’s pump narrative would have been: as traders aggressively shorted ALPACA, expecting further collapse, whales seized the opportunity. Short-sellers were forced to close their positions as the price climbed sharply, causing a cascading effect of liquidations that fueled further gains.

Altcoin analyst Wise Advice summed it up best:

“Whales are manipulating the price and liquidating shorts. We’ve seen this many times — whales pump the price to lure retailers in, only to use them as exit liquidity.”

Currently, $ALPACA remains up nearly 80% in the past 24 hours, trading around $0.1902 after touching an intraday high of $0.2089.

Related: Here Are Binance’s New Rules for Listing Tokens on Spot, Futures, and Alpha

Extreme Funding Rates Signal More Potential ALPACA Volatility

The drama is reflected in the ALPACA perpetual futures market on Binance. The funding rate there became extremely negative, hitting rates as high as -24% per day. Simply put, short sellers are paying an enormous premium just to keep their bearish bets open. Analyst  Onchainquant pointed out:

“Funding now pays 2% every hour — 48% a day! Shorts must close positions, creating potentially $50M in forced buy pressure into delisting.”

Adding to the tension is the huge $79 million in open interest (total value of open futures contracts) compared to ALPACA’s relatively small market cap of about $28 million. This extreme imbalance suggests more violent short squeezes or sharp price drops could still happen before the May 2nd delisting.

What the ALPACA Chart Says After the Explosive Pump

Looking at the technical chart, ALPACA price has exploded outside the upper Bollinger Band, suggesting a highly overbought condition. Typically, after such an aggressive breakout, price tends to consolidate or pull back towards the middle BB (currently around $0.055) before the next big move.

Meanwhile, the MACD has made a steep bullish crossover with wide separation between the MACD line and the signal line, a textbook signal of bullish momentum. However, such sharp MACD rises often precede corrections once momentum peaks.

Related: Another Round of Delistings on Binance — Is Your Favorite Token at Risk?

If the $0.1550 price level fails to hold, deeper pullback targets are $0.12 (key breakout retest zone) and $0.055 (middle BB support).