SIREN Token Rally Ignites Insider Trading and Scam Concerns Amid AI Hype

A sharp 10% correction has hit the SIREN token following its explosive rally, raising immediate red flags from market analysts over potential insider trading and scam risks. The AI-linked token, which surged to a record $2.92 on BNB Chain in under three months, is now under intense scrutiny as regulators and watchdogs warn investors of classic pump-and-dump patterns in the volatile meme coin sector.

In the past few hours, SIREN retreated from its highs, down to $2.71. The token also traded with peak volumes of nearly $150M in the past 24 hours. 

SIREN depends on centralized trading

SIREN is not yet listed on Binance, but it depends on centralized trading. This also means the liquidity is concentrated on markets like Gate, allowing market makers to move the price more efficiently. 

The token is also represented on Binance Futures, which holds the most significant share of open interest. The token saw its open interest rise to $105M as traders opened short positions. Later, some of those positions were liquidated, and open interest crashed to $65M. 

Despite this, over 59% of SIREN positions are still going short, with the potential for another short squeeze. 

The main reason for shorting SIREN was on-chain signs that DWF Labs, a major market maker, was sending tokens to exchanges. Since traders expected the market maker to sell, they prepared short positions, but traders pumped SIREN, leading to liquidations. Over $2.4M were liquidated on Binance, and $4.7M on Bybit. 

Is SIREN a risky token? 

The recent SIREN token movements were linked to addresses that were flagged for pumping other tokens in the past. On-chain researchers linked the SIREN rally to previous pumps like BULLA or RIVER, connected to the same circle of insider wallets. 

Other analysts warn that there are always tokens rallying against the market, pumped by insiders. Previous tickers with outsized gains include PIPPIN and JELLYJELLY.

In the past months, SIREN also had smaller trial rallies, which are not so noticeable against its record breakout. The rallies were sufficient for researchers to flag wallets and notice insider trading. According to analysts, over 88% of the SIREN supply is controlled and prepared for action on several spot exchanges. 

There are also remaining powerful wallet clusters with up to $950M in unrealized profits. The presence of insiders and prepared market makers, as well as position volatility, makes SIREN risky in the long term. The token may also crash at any time if insiders try to cash out. 

SIREN also rallied outside any narrative framework, as AI agent tokens have also been losing attention in the past months. However, the Siren project looks heavily curated, with a significant social media presence. 

The SIREN mindshare expanded by 233% in the past day, coinciding with the price rally. The official X handle of the project also announced ‘SIREN season’, preparing for more exposure and eventual pumps. The project also posted an official address on Solana, potentially making the token multi-chain and tapping Solana traders.

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