The OM token, native to the Mantra ecosystem, surged nearly 200% to $1.10 on April 14 after plunging 90% over the weekend to a low of $0.37, amid swirling allegations of a rug pull. The sharp rebound follows an active response from Mantra’s co-founder JP Mullin, who addressed investor concerns directly.
The project faced a wave of criticism after $5 billion in market capitalization was wiped out, along with $75.9 million in liquidated futures positions. Critics claimed the Mantra team—reportedly in control of 90% of OM’s supply—transferred significant token amounts to centralized exchanges just before the collapse.
In response, Mullin issued a statement via Telegram, denying the rug pull rumors and attributing the crash to “reckless forced closures initiated by centralized exchanges.” He also shared a verification address to prove the team’s OM holdings, stating, “We are here and not going anywhere.”
Despite the sharp recovery, skepticism lingers. Analyst Ed alleged the Mantra team may have used OM tokens as collateral for risky loans. A sudden change in loan risk parameters on centralized exchanges could have triggered margin calls, exacerbating the token’s decline. These changes followed a controversial update in October 2024, when Mantra doubled its OM token supply and shifted to an uncapped, inflationary model.
OKX CEO Star Xu labeled the incident a “big scandal,” promising further disclosures in the coming days.
From a technical standpoint, OM’s rebound bears an eerie resemblance to the failed recovery seen in Terra’s LUNA post-crash. OM remains below key support levels, including the 50-week and 200-week exponential moving averages. The weekly RSI also signals weak momentum, hovering at 33.31.
Crypto chartist AmiCatCrypto warned that OM’s bounce could be a classic bull trap: “Any gains from this point are considered bounces,” she said, suggesting that a further 90% drop remains possible.
While OM’s community regains composure, doubts persist about long-term stability, especially in a market still haunted by past collapses like LUNA.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Whales, Panic, and a Failed Airdrop: Inside Mantra’s (OM) $400M Price Crash
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