- ALPACA token saw an 800% spike followed by a 50% drop due to a delisting-driven short squeeze.
- Alpaca Finance burned over 34.98 million ALPACA, reducing circulating supply by 18.61%.
- Over 75% of traders shorted ALPACA, causing a funding rate spike and large-scale liquidations.
The ALPACA token experienced extreme volatility after a centralized exchange revealed its plan to delist the token on May 2, 2025. The company released PDA, VIB, and WING alongside the ALPACA token on April 24. One day after the announcement ALPACA experienced an 800 percent increase in price because of short squeezes accompanied by trading volume spikes.
By April 28, the token lost over half of its value in just one hour. Analysts attributed the steep drop to aggressive market selloffs. Several users on social media flagged signs of market manipulation, suggesting that large players may have borrowed tokens ahead of the delisting to depress prices and trap retail traders.
Short Squeeze and Funding Impact Intensify Movement
As speculation mounted, over 75% of traders reportedly shorted the token. This imbalance led to a daily funding rate of nearly 20 percent, causing significant losses for short sellers. Institutions and large traders benefited from these high funding fees while pushing the token’s price higher temporarily before the fall.
Despite the turmoil, the Alpaca Finance team continued to support its ecosystem. On April 29, it completed its 214th weekly repurchase and burn, destroying 188,888 ALPACA tokens worth about $41,500. The platform confirmed that more than 34.98 million tokens have been burned so far, accounting for 18.61 percent of the total supply.
Community and Platform Response Remains Active
The development team reassured users that ALPACA remains tradable on platforms like WhiteBit. Alpaca Finance emphasized ongoing DeFi ecosystem developments and highlighted the token’s roles in governance and yield farming incentives. The community showed mixed reactions, with some raising concerns over centralization risks.
The price action underscored broader concerns regarding liquidity and investor trust following centralized exchange delistings. While the ALPACA token retains utility within the DeFi space, its future performance remains exposed to regulatory shifts, speculative trades, and exchange-level decisions.
