RaveDAO’s RAVE token, a little-known project until last week, has burst onto the scene in dramatic fashion.

It is now the third-largest cryptocurrency behind bitcoin BTC$74,774.30 and ether (ETH) – not by market capitalization, but by liquidations or forced closures of leveraged futures bets by exchanges.

In the past 24 hours, exchanges have liquidated $44 million worth of RAVE futures positions, the majority of which were bearish (short) bets, according to data source Coinglass. By comparison, liquidations in bitcoin and ether stood at $229 million and $135 million, respectively.

RAVE’s outsized liquidations follow an extraordinary rally, with the token surging roughly 4,500% in seven days and lifting its market capitalization from about $60 million to $2.8 billion. To put that into perspective, the value of liquidations over the past 24 hours alone is roughly equivalent to the token’s entire market cap just a week ago. This highlights the intensity of the price surge and the degree of speculative activity driving it.

RaveDAO markets itself as a Web3-based music platform that aims to merge EDM culture with blockchain tools, including on-chain ticketing, crypto payments at events, and staking tied to live show revenues. It also highlights supposed collaborations with major exchanges like Binance and OKX, along with claims of multi-million-dollar revenue to strengthen its story of real-world adoption.

Liquidations occur when the market moves against a trader’s position, eroding their margin. If the trader fails to add collateral, the exchange forcibly closes the position.

A wave of liquidations in RAVE, particularly on short positions, suggests the rally is being driven by a short squeeze, where forced unwinding of bearish bets is amplifying upward price momentum. Of the total tally of $43.25 million, over $32 million were short bets.

Some observers allege the short squeeze may have been deliberately engineered by team members who transferred large amounts of tokens to exchanges, sparking fears of an imminent sell-off. Those tokens were then reportedly withdrawn just as quickly, which lifted prices and triggered a short squeeze.

“The setup: the first $30.58M of $RAVE (~$42M) gets transferred to Bitget, signalling a potential dump and baiting traders into short positions. Then ~$32M RAVE gets pulled back on-chain over the next 2 days while spot price gets aggressively pumped, wiping out every short that took the bait,” a popular trading community handle on X called Evening Trader Group noted.

It’s easier to move tokens like RAVE, which are controlled by a small set of wallets. The concentration of ownership often creates a highly illiquid market.

Nearly 90% of the token’s supply, 248 million, is held in three Gnosis safe wallets, almost certainly associated with team members, data from Arkham shows.

Gnosis safe addresses are usually linked to project teams because they use the standard multi-signature (multi-signature) smart contract wallets to manage crypto treasuries. In most Web3 projects, a Safe is set up with multiple “owners” (team members, founders, or signers), and any transaction—like moving tokens, minting, or selling—requires approval from a threshold of them.

This supposed manipulation has prompted some observers to urge caution going forward.

“It will dump 95%+ using the same old playbook over and over, and retail will get wrecked like always,” a pseudonymous observer, Columbus, said on X.