OM token just suffered one of the worst crashes in crypto history.
The token plummeted from around $6.30 to under the 50-cent mark in just hours.
According to Mantra’s co-founder, John Patrick Mullin, in a response tweet, centralized exchanges were to blame for the crash.
A report from SpotOnChain revealed that a group of OM whales moved 14.27 million tokens (worth $91 million) to OKX just three days before the collapse.
LookOnchain noted that at least 17 wallets moved 43.6 million OM to several exchanges from 7 April, a few days before the crash.
13 April saw Mantra's OM token suffer one of the worst crashes in crypto history.
The token plummeted from around $6.30 to under the 50-cent mark in just hours, wiping out more than $5 billion in market cap.
While the Mantra team blames reckless liquidations from Centralized exchanges for the crash, others suspect that there might have been some insider activity within the project itself.
Was foul play involved in this crash? Is a recovery incoming, or is Mantra too far gone? What does this crash mean for the market as a whole?
The OM crash came suddenly, late on Sunday UTC and early on Monday in Asia, without any warning.
The interesting thing about said crash is that it happened at an unusual time for high-volume market moves.
According to Mantra’s co-founder, John Patrick Mullin, in a response tweet, centralized exchanges were to blame for the crash because they initiated “reckless forced closures” on OM traders without first warning them properly.
Dumping tokens without prior warning | Source: Twitter
He argued that one exchange in particular was more responsible than the others for the crash.
Even though he declined to provide a name at the time, he clarified that it wasn’t Binance.
Mullin explained that this type of liquidation caused a rapid sell-off that overwhelmed the market.
He believes that the crash was either caused by negligence or someone deliberately manipulated the market.
Despite the explanation from Mullin, speculators continued to suspect foul play.
Many of these pointed towards possible insider involvement or poor internal controls.
Interestingly, a report from SpotOnChain emerged shortly after, revealing that a group of OM whales moved 14.27 million tokens (worth $91 million) to OKX just three days before the collapse.
Suspicious moves from whales | Source: Twitter
Adding to the suspicion of foul play, SpotOnChain noted that these same wallets had acquired 84.15 million OM (worth $564.7 million) in March.
However, these wallets were unlikely to have been involved because their remaining 69.08 million OM tokens are now worth just $62.2 million.
This means that they have a total unrealized loss of over $400 million unless they hedged elsewhere in a more elaborate scheme.
Another complication to the matter is how LookOnchain noted that at least 17 wallets moved 43.6 million OM to several exchanges from 7 April.
More suspicious moves | Source: Twitter
This means that said whales moved about 4.5% of OM’s circulating supply right before a crash.
Two of these wallets are even allegedly connected to Laser Digital, a strategic investor in Mantra.
This kind of unusual movement in OM tokens so close to the crash has raised red flags:
Red flags that many community members are comparing to the infamous Terra LUNA and FTX collapse three years ago.
OM wasn’t the only casualty in the crash. Other cryptocurrencies like ACT, TST, MASK, and LEVER also suffered from these losses, amid wider concerns about how much power centralized exchanges have on the markets.
The crash also triggered massive liquidations across the board.
Coinglass data shows that OM-related liquidations approached the $70 million mark in mere hours.
OM liquidations on Coinglass | Source: Coinglass
The OM bulls suffered nearly $50 million in loss, compared to the bears with $20 million.
This further paints a picture of the market being caught off-guard.
The ongoing OM crash | Source: TradingView
OM has recovered slightly after the crash and is now trading near the 40.7 mark after attempting to cross the $1 threshold.
The token is now down more than 91% from its all-time high of nearly $9 in late February.
Technically, the token is now in oversold territory with the RSI and MACD showing bearish tendencies.
Getting into the market at this point would be akin to attempting to catch a falling knife.
Investors should consider waiting for an entry signal before attempting to buy the dip.
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