OM Token Rebounds 200% After 90% Plunge, Analysts Warn of Risks

Mantra’s OM token experienced a dramatic rebound of 200% following a significant collapse, but analysts have raised concerns about potential structural risks similar to those that led to the downfall of Terra LUNA. The token's price plummeted from $6.30 to below $0.50 within hours on April 13, resulting in the loss of over 90% of its $6 billion market cap. This sudden drop triggered more than $75 million in liquidations in OM futures positions, causing widespread panic and speculation about a potential rug pull.

In response to the allegations, Mantra’s co-founder JP Mullin addressed the concerns in the project’s Telegram group, attributing the price collapse to "reckless forced closures initiated by centralized exchanges" rather than any wrongdoing by the team. Mullin provided a verification address to show the team’s token holdings, which helped to ease some of the panic. Despite this, skepticism remains high among investors, who are wary of the token's recovery sustainability.

Critics have pointed to the fact 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. 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 suggest continued weakness in market momentum. 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, indicating that the market momentum is still weak. Chart analyst AmiCatCrypto compared the current OM chart to LUNA’s failed recovery in 2022, warning that any upward moves at this point are likely “just bounces” and that OM could fall another 90% in a single day.

Blockchain analytics firms have pointed 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. 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. Binance attributed the crash to cross-exchange liquidations and warned users of OM’s changing token economics months ago. Mantra has promised a full postmortem soon.