The RAVE token from RaveDAO has unexpectedly entered the spotlight recently, not for its market capitalization, but rather due to a record number of liquidated futures positions. Currently ranking third in terms of liquidation volume behind bitcoin and ether, RAVE saw $44 million worth of futures contracts closed by exchanges over the last 24 hours, according to Coinglass. In comparison, bitcoin and ether experienced liquidations valued at $229 million and $135 million respectively.
This surge follows a dramatic 4,500% increase in RAVE’s price within just seven days, boosting its market cap from approximately $60 million to $2.8 billion. The sheer volume of these recent liquidations—equivalent to the token’s entire previous week’s market cap—underscores the speculative nature fueling this rise.
RaveDAO presents itself as a Web3 music platform integrating blockchain technology into EDM culture, featuring on-chain ticketing, event crypto payments, and staking linked to live show revenues. The project claims partnerships with major exchanges like Binance and OKX, alongside multi-million-dollar revenue figures to bolster its credibility in real-world adoption.
Liquidations occur when a trader’s position is closed by an exchange due to insufficient margin collateral, often during adverse market movements. The recent wave of RAVE liquidations, particularly from short positions, indicates a possible short squeeze driving up prices as bearish bets are unwound forcibly.
Of the total $43.25 million in liquidations, over $32 million involved short positions. Some analysts suggest this short squeeze might have been orchestrated by team members who transferred large token quantities to exchanges, inducing fears of sell-offs that were promptly withdrawn once price hikes began, thereby triggering a squeeze.
“The first ~$30.58M ($RAVE) gets shifted to Bitget (~$42M), hinting at a dump and luring traders into shorts. Then ~$32M RAVE is retracted over two days while the spot price surges, eliminating all who fell for it,” noted Evening Trader Group on X.
Given its concentration in just three Gnosis safe wallets holding nearly 90% of the supply (248 million tokens), moving RAVE tokens proves easier due to low market liquidity. These Gnosis safes are typically associated with project teams as they employ multi-signature smart contract wallets for managing crypto assets, requiring multiple approvals for transactions.
Such concentration and potential manipulation have led some observers to caution against further investment in the token.
“It will likely drop 95%+ using familiar tactics repeatedly, leaving retail investors at a disadvantage,” commented pseudonymous observer Columbus on X.