The Mantra [OM] token has experienced a devastating crash of over 90% in just 24 hours, resulting in a loss of $68M in value. Co-founder JP Mullin has attributed the plunge to “reckless” liquidations, but investors remain skeptical of any wrongdoing. With charts plummeting and sentiment deteriorating, many are labeling it as a live rug pull, causing chaos in the crypto market.
The crash of OM has not only resulted in the largest price drop but has also led the liquidation heatmap, with over $68 million in long positions liquidated within a short period. Traders saw over $1.11 million worth of OM long positions forcibly closed, surpassing liquidation volumes of popular cryptocurrencies like Bitcoin and Ethereum. The rapid decline caught many over-leveraged traders off guard, triggering margin calls as OM broke through key support levels.
Allegations of market manipulation and insider dumping have emerged following the massive crash of OM. With nearly 90% of the token supply allegedly controlled by the team, panic selling escalated as OTC buyers went underwater, potentially triggering cascading liquidations. While JP Mullin defended the project, blaming centralized exchanges for forced closures during low-liquidity hours, traders remain suspicious and liken the collapse to past rug pull disasters.
Crypto market commentators have pointed out the similarities between the OM crash and previous rug pull events in the crypto space. With comparisons to past disasters like Terra Luna and FTX, the market is quick to judge and unforgiving towards projects that experience sudden crashes. The loss of trust in OM has raised concerns about inflated valuations and the importance of liquidity over market cap. As investors lose faith in OM, there may be a rotation of capital into more credible projects.
In conclusion, the collapse of the Mantra [OM] token serves as a cautionary tale in the crypto market, highlighting the risks of over-leveraging and the importance of transparency and trust in projects. Whether the crash was a result of market manipulation or genuine market dislocation, investors must remain vigilant and conduct thorough research before investing in cryptocurrency projects. As the crypto market continues to evolve, it is essential for participants to stay informed and cautious to avoid falling victim to rug pulls and sudden price crashes.
