RAVE token, the native coin of the RaveDAO ecosystem, has experienced a spectacular drop of over 95% from its peak of USD 28 on April 18th down to USD 0,90. This loss is due in part to what many believe is a fabricated “short squeeze” driven by low float supply, forcing retail investors to buy tokens at inflated prices. At the same time, just a few days ago, the crypto market saw the RAVE token surge by over 11,000%, from less than USD 0.30 to nearly USD 30. A quite suspicious pump.
What Caused the Crash
The RAVE token had a very concentrated ownership structure (over 90% of total tokens owned by insiders), and onchain data showed that there was nearly no available float (the amount of available tokens to trade), creating an ideal low supply situation where only very little buying pressure could cause large price movements. Hours before the first rally, 18.58 million tokens were deposited on Bitget, likely in an effort to entice and coordinate short sellers into placing their orders on the exchange. When the price surged, many of these short positions were liquidated and caused even further buying pressure, a classic short squeeze, and then a violent reverse when insiders allegedly sold their tokens.
This crash liquidated over USD 44 million worth of leveraged positions just on Friday, April 17th, and saw a 100% price movement on an intraday basis due to peak volatility. Today, at the time of writing, over USD 27 million has been liquidated. So far, the RAVE token price volatility exceeded 114.5%, and around 37,483 traders were liquidated globally.
Project Team’s Response
The RaveDAO project denied involvement in any manipulation or insider job, stating on X that the team “is not involved in the high volatility of the RAVE token price” and is “not responsible for the recent price fluctuations.”
They also repeated their focus on “promoting mass adoption of Web3 through offline events” and “charitable donations (20% of total profits from our events) will be made to pay for eye surgery in Nepal.” Some critics have labeled the project’s response as “hollow” because it does not specifically address onchain evidence of insider wallet activity.
Crypto in Shock: What Comes Next
Onchain analyst ZachXBT posted a timeline about what happened with the RAVE crash, per a recent investigation. Finding very suspicious activity throughout all these days, from the first pump to today’s drop, contradicting RaveDAO’s statements, with a USD 6 billion market cap wipeout on USD 52 million liquidations in 24 hours, pointing to a manipulated and unsustainable valuation ratio.
Per these warnings, both Binance and Bitget are conducting formal investigations into RaveDAO. The incident has drawn attention and will prompt increased inspection of low-liquidity tokens with concentrated ownership, and regulators may take notice. For now, the challenge for the team will be to build back its credibility. To this point, its “long-term horizon” will now be measured against whether any team members are found to have participated in the pre-pump transfers.
