Until last week, RAVE token was a little-known player in the cryptocurrency sector. In recent days, however, it has drawn widespread attention for its dramatic price swings, leading to significant liquidations in leveraged futures trading. The majority of those liquidations targeted positions betting RAVE’s price would fall, leaving many traders heavily in the red.
Massive Liquidations Hammer Short Positions
In the past 24 hours, crypto exchanges witnessed a total of $44 million worth of RAVE futures positions being liquidated. This figure ranks RAVE behind only Bitcoin—at $229 million—and Ether—at $135 million—in terms of daily liquidation volume, marking it as the third highest among cryptocurrencies for the day.
Short positions, which bet on the token’s price dropping, made up the bulk of these liquidations. Over $32 million of the wiped-out positions were shorts, indicating that a sudden and rapid price surge triggered a classic short squeeze, catching traders off guard and forcing mass closures.
Within just seven days, RAVE’s price skyrocketed by more than 4,500%. The token’s market capitalization soared from $60 million to $2.8 billion. In a remarkable move, the amount liquidated in a single day was almost equal to the token’s total market value from just a week earlier.
RaveDAO’s Platform and Manipulation Allegations
RaveDAO presents itself as a Web3-based music platform with ambitions to blend electronic music culture with blockchain technology. It claims to offer blockchain-powered ticketing, crypto payments at events, and staking options tied to live show revenues. Announcements about perceived partnerships with major exchanges like Binance and OKX, as well as multimillion-dollar revenue projections, have fueled heightened interest in the project.
In leveraged trading, a liquidation occurs when the market moves against a trader’s position and their collateral becomes insufficient, forcing the exchange to close the trade. The unprecedented series of RAVE liquidations was triggered by the token’s unexpected price explosion, devastating those on the wrong side.
Observers have suggested that the short squeeze may have been deliberately engineered by the RaveDAO team, which allegedly transferred large amounts of tokens onto exchanges. As investors interpreted these transfers as a sign of an impending sell-off, the tokens were rapidly withdrawn back into wallets, driving the price up and leading to the mass liquidation of short positions shortly thereafter.
“Here’s how it happened: first, $30.58 million worth of RAVE was moved to the Bitget exchange, which strongly signaled a mass selloff. Then, within two days, approximately $32 million in RAVE was withdrawn back to the blockchain, with the spot price aggressively pushed higher so all opened short positions were liquidated,” explained the popular X community Evening Trader Group.
RAVE token control is heavily concentrated. Nearly 90% of the token’s supply—amounting to roughly 248 million RAVE—sits in just three Gnosis Safe wallets. Data analysis conducted by Arkham suggests these wallets are closely associated with members of the project’s core team.
Gnosis Safe wallets are multi-signature smart contract wallets commonly used by crypto projects to secure their treasuries. In such setups, multiple signatures from project leaders, founders, or authorized signers are required to authorize transactions, aiming to increase security and trust.
Following the manipulation allegations, several industry voices have urged investors to exercise increased vigilance when engaging with projects of this nature, warning of significant risks for retail traders.
Pseudonymous investor Columbus stated, “A 95% or greater price crash is unavoidable in similar scenarios, and retail investors will suffer the most losses.”
