PIPPIN surges 33% in 3 days: Is it due to derivatives short covering or new coin hype?

PIPPIN achieved a significant 24-hour increase of 33.64% just three days after launch. The current price is $0.38, with a market cap of $379 million and a 24-hour trading volume of $43.1 million. This new project based on the Solana chain has quickly attracted market attention, but the driving forces behind the rapid price rise warrant in-depth analysis. According to the latest news, this surge is not driven by fundamental improvements but is a direct result of the liquidity structure in the derivatives market.

Derivatives Market Short Liquidations Drive Price Rebound

According to the latest reports, the core driver of PIPPIN’s recent surge stems from liquidity pressure in the derivatives market. There are large-scale short positions, including one account that has been holding a position for about 45 days since opening on November 22, 2024. The current unrealized loss has reached $2.843 million, and when including high-frequency funding costs, the total loss amounts to $4.945 million. Such substantial losses often force short sellers to liquidate, creating a chain reaction of short squeezes that rapidly push the price upward.

Funding Rate Reflects Short Pressure

Since November 30, 2024, PIPPIN has mostly experienced negative funding rates, directly reflecting the pressure from short positions in the market. Negative funding rates mean shorts must pay longs, which increases the cost for short sellers and forces them to accelerate liquidation. The ongoing demand for short liquidation has become a key factor in the price rebound, but this upward movement driven by liquidity structure is unrelated to fundamental improvements.

Volatility Reflects High Leverage Characteristics

Looking at the price fluctuation range, PIPPIN rebounded from a low of $0.24 to a high of $0.53 within 24 hours, with a volatility exceeding 120%. This extreme volatility is typical of high-leverage derivatives markets—large open interest positions can trigger chain liquidations with small price movements, causing nonlinear and rapid reversals. Over the past week, PIPPIN experienced intense fluctuations between $0.28 and $0.61, with hourly drops exceeding 20%, highlighting the extreme volatility risks in a high-leverage environment.

Concentration of Holdings Amplifies Manipulation Risks

On-chain data shows that PIPPIN’s token distribution is highly concentrated, which is a significant risk factor to monitor. 93 wallets control 80% of the total supply. Additionally, there are 16 new wallets with similar accumulation patterns and 11 related wallets holding about 9% of the total supply. This indicates that a small number of entities have substantial influence over the price.

Typical Features of New Tokens

PIPPIN was launched on January 6, 2025, and is currently ranked 118th by market cap. As a newly listed token only three days old, its extremely concentrated holdings and lack of substantial fundamental narratives mean that its price movements are more driven by liquidity and capital structure rather than project fundamentals. Although positioned as a “community ecosystem filled with gentle miracles” and incorporating BabyAGI technology, the project has limited information disclosure, making it difficult to justify its current market cap.

Future Trends May Show Rapid Reversals

Based on the microstructure of the current derivatives market, PIPPIN’s subsequent price action may feature rapid reversals. Once the short liquidation pressure is exhausted, the price—lacking fundamental support—may face swift correction. Moreover, the fragility of liquidity in a high-leverage environment means that even relatively small sell-offs could trigger large-scale chain liquidations, leading to a rapid decline in price.

Summary

PIPPIN’s 24-hour 33% increase is driven by short liquidations in the derivatives market, not by fundamental improvements or project progress. It is crucial for investors to understand that this type of upward movement, dominated by liquidity structure, is highly unsustainable. The extreme volatility associated with high leverage, the highly concentrated holdings, and the lack of transparency in new tokens all contribute to a high-risk market environment. Rapid price increases are often followed by quick reversals; understanding the specific mechanisms behind the price surge is far more important than blindly following the trend.