The value of Mantra’s OM token has experienced a significant rally following a steep decline over the weekend. However, financial analysts caution that this rebound might be fleeting, drawing parallels to the early days of the Terra LUNA market crash in 2022.
On April 13, the price of OM nosedived from $6.30 to below $0.50 in a matter of hours, erasing more than 90% of its $6 billion market capitalization. This dramatic sell-off resulted in more than $75 million in liquidations of OM futures positions.
Mantra lost 90% of its value in just one hour — $6B gone. No hack, no clear reason. Just “liquidations,” team silence, and big wallet moves. What really happened, and which red flags did investors ignore? https://t.co/2HeL1ZiMhG
— Finance Newso.com (@Finance Newso) April 14, 2025
As the market grappled with fear and uncertainty, allegations of a rug pull emerged on social media. Observers highlighted dubious token transactions and raised concerns regarding the project’s controversial tokenomics.
Concerns About OM Token Echo Terra LUNA Incident
In response to the growing unease, Co-founder JP Mullin addressed community members in the project’s Telegram group, asserting, “We are here and not going anywhere.” He attributed the drastic price drop to “reckless forced closures initiated by centralized exchanges” rather than any malfeasance on the part of the team. Mullin further provided a verification address to clarify the team’s token holdings.
This announcement temporarily mitigated some panic, resulting in a rebound for OM, which surged nearly 200% from its post-crash low of $0.37 to as high as $1.10 on April 14. Nevertheless, skepticism among investors remains pervasive.
Source: Finance Newso
Critics argue that Mantra’s core team reportedly possesses control over approximately 90% of the token supply, leveraging their OM holdings to secure high-risk loans. Analyst Ed pointed out that a sudden revision of loan risk parameters by centralized exchanges led to a margin call and intensified the token’s decline.
BREAKING:
BEFORE THE $OM CRASH, 17 WALLETS DEPOSITED 43.6M $OM ($227M) TO EXCHANGES
THAT’S 4.5% OF CIRCULATING SUPPLY.
2 WALLETS ARE LINKED TO LASER DIGITAL, A STRATEGIC INVESTOR.
— Crypto Rover (@rovercrc) April 14, 2025
OKX, one of the exchanges involved in the incident, had previously revised its lending framework after Mantra shifted to an inflationary model in October 2024, effectively doubling its total token supply from 888 million to 1.77 billion.
Star Xu, CEO of OKX, described the incident as a “big scandal,” indicating that the exchange will provide additional reports regarding the situation in the coming days.
OM Token Faces Key Resistance Levels Amid Struggles
Despite the recent price recovery, the technical indicators for OM signal potential challenges ahead. The token remains significantly lower than its 50-week exponential moving average near $3.25 and is currently encountering resistance around the 200-week EMA at approximately $1.08.
The weekly relative strength index has decreased to 33.31, indicating persistent weakness in market momentum. Chart analyst AmiCatCrypto has likened the current performance of the OM token to LUNA’s failed recovery attempt in 2022.
“If you ask me if the bull market is over. Short answer. YES,” she commented on social media, warning that any upward movements at this juncture could merely represent temporary bounces.
$OM #OMUSDT
Almost 100% wiped. In one single night
And this used to be one of the most credit, trustful #RWA projects
We are in a state where everything is so fragile that it can vanish 90% within one day after 100 days of gains
If you ask me if the bull market is over. Short… pic.twitter.com/ExU0rXe2DN
— AmiCatCrypto (@AmiCatCrypto) April 14, 2025
Even with recent gains, she noted that OM could still plummet by another 90% in a single day, sustaining investor apprehension about a potential further downturn.
OM Token’s Collapse Linked to Whale Activity and Exchange Deposits
Meanwhile, blockchain analytics firms have identified significant whale transactions and concentrated sell-offs as key factors contributing to OM’s drastic fall. Spot On Chain reported that whales transferred 14.27 million OM to OKX just days ahead of the crash.
Just within 3 days before the crash, this group of fresh $OM whales moved 14.27M $OM (~$91M) to #OKX at an average price of $6.375.
Back in late March, they had jointly acquired 84.15M $OM from #Binance for ~$564.7M (avg. $6.711).
Now, after a brutal ~90% drop, their… https://t.co/H7EASdsZaG
— Spot On Chain (@spotonchain) April 14, 2025
This same group of investors had purchased over 84 million OM in March for $564.7 million, but following the monumental drop, their remaining holdings are now valued at roughly $62 million.
Lookonchain also highlighted that since April 7, at least 17 wallets have deposited 43.6 million OM onto various exchanges, accounting for approximately 4.5% of the circulating supply.
However, Binance attributed the downturn to cross-exchange liquidations and had warned users of OM’s evolving token economics months prior. Mantra has promised a comprehensive analysis of the situation shortly.
Binance is aware that $OM, the native token of MANTRA, has experienced significant price volatility. Our initial findings indicate that the developments over the past day are a result of cross-exchange liquidations.
Since October of last year, Binance has implemented various…
— Binance Customer Support (@BinanceHelpDesk) April 14, 2025
The upheaval in Mantra’s OM token provides a stark reminder of the volatile landscape of cryptocurrency investments, as many investors keep a close watch on future developments.
