big dump, liquidation, score manipulation arbitrage: the "script collapse" of ZKJ and KOGE

The prices of ZKJ and KOGE experienced a flash crash, which seems to have pulled the sentiment of the entire crypto market back to that fragile state of “crashing at any moment”. Interestingly, Binance actually modified the calculation method of Alpha points at the first opportunity, clearly indicating that this big dump is not just a simple matter of “unstable Liquidity.”

Let’s break this down and take a look at it:

On one hand, it is a systemic sell-off triggered by the big dump in coin prices and the drying up of on-chain liquidity;

On the other hand, it is about how the platform mechanism is utilized and how to quickly “patch the vulnerabilities.”

It is both a price action and a systemic game, and it may even be a designed “compliance reward gameplay.”

ZKJ, KOGE big dump + point rule adjustment, what exactly happened?

Let’s quickly outline the key timeline:

The two events seem independent, but are actually highly related:

On-chain big holders withdraw funds → price plummets → liquidation chain → incentive rules change

The whole process is like a “closed script,” except this time, most of the traders are the ones being liquidated in the script.

On-chain withdrawal + Alpha points, both mechanisms are being “used forcefully” at the same time.

ZKJ and KOGE were originally among the more active coins in the Alpha ecosystem, but their liquidity is primarily concentrated in on-chain LP (liquidity pools). Once large holders withdraw simultaneously from these assets, it is equivalent to dismantling the price protection wall directly. The original intention of the Alpha points mechanism itself is to incentivize users to participate in ecosystem development. However, due to its scoring logic focusing on “trading volume” rather than “trading quality,” repeatedly matching trades internally within the Alpha ecosystem can quickly accumulate points. The problem is that ZKJ and KOGE are precisely used as one of the main channels for “point brushing.”

This has led to a closed loop: certain traders first withdraw funds on-chain → causing a big dump in price → simultaneously creating a liquidation cascade → the surge in trading volume in turn allows bot accounts to gain points → racing ahead before the points rule revision.

Within the Alpha ecosystem, the selection of ZKJ and KOGE is not coincidental, but rather resembles a “points detonator” card designed by mechanism arbitrageurs.

Why did the Alpha incentive mechanism become a “systemic vulnerability”?

From Binance’s perspective, the Alpha point system is not simply a “reward point”; it is more like a liquidity guiding lever for the platform ecosystem. Under normal circumstances, active trading can bring popularity to the platform, and points can feed back to loyal users. However, once this mechanism is overly optimized, point distribution can instead become a tool for arbitrage.

The focus of this modification to the points system is to cut off the “刷量通道” between Alpha-Alpha. This is equivalent to shutting down the “内循环” mode commonly used by the “刷子”. In other words, in the past, you could use several Alpha ecosystem coins to self-match and fill up your points, but now you must present real trading pairs and provide positive incentives to liquidity providers.

In other words, this adjustment is not just an emergency repair, but also a punishment for “fake trading” while rewarding “true liquidity.”

The signal it sends is clear:

The platform is redefining what constitutes “valuable trading behavior.”

For strategy traders, this means that strategies that originally relied on “volume arbitrage” need to be completely restructured.

Trading signal: Finding gold from chaos

Taking ZKJ as an example, this flash crash is definitely not just a simple emotional panic. From the market structure, technical patterns to the on-chain capital flow, it resembles a premeditated and rhythmic “killing action”.

Let’s first take a look at the trend. The price is not slowly retracing, but instead is experiencing a cliff-like fall—from a high of $1.094 on June 15 to a drop to $0.253 in the early hours of the 16th, with a single-day decline exceeding 76%. This is not a crash; it is a calculated strike: penetrating the EMA 20-day moving average, previous platform support, and multiple key stop-loss levels all at once, as if intentionally igniting a liquidation chain, wiping out all the long positions in one go.

Let’s take a look at the trading volume and technical indicators on the chart:

The big bearish candle that broke below $0.25 saw trading volume surge to 200M, clearly indicating that large funds were actively dumping, which highly corresponds with the “1.573 million ZKJ large sell-off” in news 1;

RSI quickly fell from 37.48 to 2.48, extremely oversold, indicating that the selling pressure has been completely released in the short term.

The MACD fast line first clearly crosses below the slow line, establishing a bearish trend, but the fast line starts to flatten out and even crosses above the slow line, indicating that the downward momentum is weakening.

These are the “counter-rebound models” familiar to technical traders: the first hit breaks through support → liquidation triggers a big dump → extreme RSI values → volume exhaustion → stop-drop fluctuation. The closer it gets to the bottom, the easier it is to see a violent rebound.

“So how to mine gold from the chaos?”

Enter the market in batches around $0.253, targeting a short-term rebound to $0.652 (close to Fibonacci level 0.236): After the market experiences an extreme big dump, prices often do not immediately start a new trend but instead enter a state of technical recovery rebound. This rebound usually does not challenge previous highs but rather retreats a certain portion of the fall in a somewhat regular manner. Fibonacci retracement is calculated based on this “natural recovery rhythm,” and 0.236 is the most common first technical rebound level after a big dump, especially in the absence of macro positive news, relying solely on emotional recovery.

Set the stop-loss below $0.23, tolerating a 5%-10% drawdown risk, and rely on the RSI rebounding from extreme values to the 15-20 range to speculate on a rebound. Setting up automatic trading and alerts helps efficiently capture rebound windows.

What should we pay attention to after this round of big dump?

The incident with ZKJ and KOGE has already passed, but the aftershocks of this event are not over yet.

On the one hand, other coins with “high point weight + poor liquidity” may become the next hunting target;

On the other hand, the platform has begun to reflect on its mechanisms, and the old path of “mining through trading” is no longer viable.

If you are a strategic trader, what you need to think about now is how to construct a more “healthy” arbitrage method using new rules, such as earning points by combining trading depth, Liquidity provision behavior, holding time, and other dimensions, rather than just focusing on traffic!

More importantly, this round of events is also reminding us:

In the crypto market, the mechanism is the rule, and the rule is the battlefield.

Behind a flash crash, there are interwoven interactions and mutual games among three parties: on-chain capital allocation, inducement of trading behavior, and actions taken by platform policies. This situation represents both risks and opportunities.