Mantra’s OM Price Recovers 200%, But Analysts Warn of LUNA-Level Risk

The price of Mantra’s OM token has rebounded sharply after a dramatic weekend collapse, but analysts warn that the recovery may be short-lived and structurally similar to the early stages of the Terra LUNA crash in 2022.

On April 13, OM plummeted from $6.30 to below $0.50 within hours, wiping out over 90% of its $6 billion market cap. The sell-off triggered more than $75 million in liquidations in 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

As panic spread across the market, allegations of a rug pull began circulating online. Critics pointed to suspicious token transfers and the project’s controversial tokenomics.

The Mantra team quickly addressed the concerns. Co-founder JP Mullin responded directly in the project’s Telegram group, stating, “We are here and not going anywhere.”

He attributed the price collapse to “reckless forced closures initiated by centralized exchanges” rather than any wrongdoing by the team. Mullin also provided a verification address to show the team’s token holdings.

This response helped ease some of the panic, with OM bouncing back nearly 200% from its post-crash low of $0.37 to as high as $1.10 on April 14. Despite the recovery, skepticism remains high.

Critics allege that Mantra’s core team reportedly controls around 90% of the token supply and uses their OM holdings as collateral to secure high-risk loans.

According to analyst Ed, a sudden change in loan risk parameters by centralized exchanges triggered a margin call, exacerbating the token’s fall.

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. pic.twitter.com/mFEYMabU37

OKX, one of the exchanges involved, had previously adjusted its lending framework in response to changes made by Mantra in October 2024, when the project shifted to an inflationary model and doubled its total token supply from 888 million to 1.77 billion.

OKX CEO Star Xu described the event as a “big scandal,” stating that the exchange would release further reports on the situation in the coming days.

Despite the price rebound, OM’s technical indicators paint a concerning picture. The token remains well below its 50-week exponential moving average near $3.25 and is now facing resistance at the 200-week EMA around $1.08.

The weekly relative strength index has dropped to 33.31, suggesting continued weakness in market momentum.

Chart analyst AmiCatCrypto compared the current OM chart to LUNA’s failed recovery in 2022.

“If you ask me if bull market is over. Short answer. YES,” she wrote on social media, warning that any upward moves at this point are likely “just bounces.”

$OM #OMUSDT

Almost 100% wiped. In one single night

And this used to be one of the most credit, trustful #RWA project

We are in a state that everything is very fragile that it can vanish 90% within 1 day after 100 days of gain

If you ask me if bull market is over. Short… pic.twitter.com/ExU0rXe2DN

Despite short-term rallies, she added that OM could fall another 90% in a single day.

While OM has recovered some ground, the underlying structural risks remain unresolved, leaving investors wary of another potential breakdown.

Meanwhile, blockchain analytics firms point to major whale activity and concentrated sell-offs as key triggers behind OM’s sudden collapse.

Spot On Chain revealed that whales moved 14.27 million OM to OKX just days before the price 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 scooped up 84.15M $OM from #Binance for ~$564.7M (avg. $6.711).

Now, after a brutal ~90% drop, their… https://t.co/H7EASdsZaG pic.twitter.com/VsePiGlStV

These same entities acquired over 84 million OM in March for $564.7 million, but after OM’s 90% plunge, their remaining holdings are now worth just $62 million.

Lookonchain also flagged that since April 7, at least 17 wallets have deposited 43.6 million OM onto exchanges, about 4.5% of the circulating supply.

However, Binance attributed the crash to cross-exchange liquidations and warned users of OM’s changing token economics months ago. Mantra promises a full postmortem soon.

Binance is aware that $OM, the native token of MANTRA, has experienced significant price volatilities. 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…

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