- $OM, the native cryptocurrency of the platform, plummeted by over 90% within hours between Sunday and Monday.
- According to Mantra co-founder John Patrick Mullin, this massive crash came as a result of “reckless forced closures from centralized exchanges”
- The Mantra team controls a staggering 90% of OM’s supply and dumped their entire allocation on the market per speculation on Twitter
This week started on a particularly bearish note for Mantra holders, as $OM, the native cryptocurrency of the platform, plummeted by over 90% within hours between Sunday and Monday. This crash has sent a chill through the crypto industry, with billions in market cap now wiped off the board.
The Mantra crash is now being compared to the infamous Terra LUNA collapse, and as investors scramble for answers, there are several conflicting theories and allegations from across the market. What could have happened, and why is the crypto industry suspecting foul play?
A Drop With No Clear Reasons
Only days ago, OM was one of the best-performing cryptocurrencies on the market. The cryptocurrency surged by over 400% last year, with little public hype, drawing more investors into its ecosystem. However, on 13 April, the token’s price took a nosedive and crashed from $6.21 to below $0.49.
This move wiped out billions in market cap and reversed almost all of its market gains from last year. The market reacted with confusion, especially because unlike other altcoins, Mantra had no clear technical issues or even a macroeconomic trigger. This hole in information created space for speculation, and the crypto industry wasted no time in providing some.
MANTRA Team Points to Centralized Exchange Liquidations
Soon after the crash happened, the Mantra team took to Twitter (now X) to address the community. According to Mantra co-founder John Patrick Mullin, this massive crash came as a result of “reckless forced closures from centralized exchanges”.
He claimed that these actions happened during low liquidity hours, which played a major role in how severe the crash turned out to be. The team denied any involvement in the crash and continued to maintain that the project itself was fundamentally strong. “This was not our team,” Mullin said. “We are looking into it and will share more details.”
Mullin went further to mention that the crash might have been due to “intentional market positioning” from some centralized exchanges. While he failed to mention any by name, he clarified that it wasn’t Binance.
Over $50 Million Wiped Out
According to on-chain data from Coinglass, OM futures contract holders saw over $50 million in long-side liquidations. This stands as the highest ever recorded for the token. In addition, open interest on OM futures dropped from $345 million to just $130 million as leveraged traders left or were kicked off their positions en masse.
At the same time, trading volume soared from $70 million to nearly $700 million, as an indicator of panic-driven selling. The daily $OM/USDT chart also shows a massive RSI drop below the 30/100 mark, indicating that the market became oversold almost instantly. So far, multiple analysts and on-chain sleuths continue to point out that the crash may have been an intentional rug pull. This is without mentioning how the Mantra team controls a staggering 90% of OM’s supply and dumped their entire allocation on the market, according to more internet speculation.
