On April 14th, the OM token from Mantra experienced a remarkable rebound, climbing nearly 200% from a post-crash low of $0.37 to a high of $1.10. This resurgence followed a catastrophic drop of 90% over the weekend, primarily triggered by fears of a potential rug pull scam that engulfed the community. In light of these events, co-founder JP Mullin stepped forward to address mounting concerns, assuring users of the project’s stability.
Following the announcement, which included verification of the team’s token holdings and a commitment to transparency, the community appears to have calmed, restoring some confidence in the token’s future. The statements indicated that exchanges’ reckless forced closures contributed to the drastic moves in the token value, directly attributing the crash to external pressures rather than internal misconduct.
The Aftermath of the Plunge
The recent fluctuations in the OM token price resulted in the obliteration of over $5 billion in market capitalization, alongside the liquidation of approximately $75.88 million worth of futures positions in a single day. Controversially, critics have claimed that the Mantra team, allegedly in control of 90% of the token supply, orchestrated this sell-off, pointing to suspicious transfers to centralized exchanges before the crash.
Market analysts further speculated on potential internal mismanagement, suggesting that the team’s OM holdings had been used as collateral for high-risk loans on centralized exchanges. A sudden change in loan risk parameters may have triggered an unfavorable margin call, accentuating the downward spiral of the token’s price.
Comparative Analysis with LUNA
While OM’s rebound may seem impressive, it raises concerns of a potential bull trap reminiscent of the notorious LUNA fallout in May 2022. This resemblance is marked by OM’s recent price structure that shows a crash beneath significant moving averages, now testing resistance levels that, if unsustained, may lead to a further decline.
The weekly relative strength index (RSI) has dropped significantly, suggesting a loss of upward momentum and increasing risks of another breakdown in the short term. Such a scenario mirrors the aftermath of the LUNA crisis where fleeting recoveries ultimately led to deeper declines.
As experienced in LUNA’s case, OM faces skepticism despite contextually favorable technical recoveries, with analysts posturing that any gains realized from this point could be temporary bounces rather than indications of a market recovery.
In light of these events, the future of the OM token remains uncertain, with cautious investors advised to refrain from speculative trading and instead closely monitor market conditions and official communications from the Mantra team.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
