Mantra (OM) price crashes over 90% as centralized exchanges dump tokens

The price of Mantra (OM) plunged over 90% on Apr. 13, falling from around $6.30 to below $0.50 within hours. In an Apr. 14 post on X, Mullin said the sharp drop in OM's price was caused by forced liquidations triggered by centralized exchanges.

The price of Mantra (OM) plunged over 90% on April 13, falling from around $6.30 to below $0.50 within hours. The token’s market capitalization also shrank by over $5 billion, reducing it to less than $485 million at its lowest point.

Several analysts have offered explanations for the sharp decline in OM's price, attributing it to either forced liquidations by centralized exchanges or a large-scale token deposit on OKX that sparked widespread selling pressure.

In an April 14 post on X, Mantra chief executive officer JP Mullin claimed that the actions of centralized exchanges during low-liquidity hours on Sunday evening UTC may have amplified the market impact of liquidations on OM.

These liquidations were triggered by derivatives traders who used high leverage to amplify their returns, which in turn led to a chain reaction of margin calls and bankruptcies, as reported by Ben Armstrong.

However, several independent analysts have made contradictory claims. One crypto analyst, Max Brown, claimed that the sell-off started when 3.9 million OM tokens were deposited on OKX by a wallet that was thought to be connected to the Mantra team.

Given that the team allegedly controls almost 90% of the total supply, this move alarmed the market and triggered a sell-off.

The sharp sell-off erased more than $5.5 billion in market capitalization, shrinking OM's market cap from $6 billion to below $485 million at its lowest point.

The token is trading at $0.8623 at press time, down 90% from its February all-time high of $8.99. OM's trading volume has jumped more than 2,500% in the last 24 hours, reaching $1.9 billion, as per crypto.news price tracker.

Launched as a regulatory-compliant real-world asset-focused layer-1, Mantra has made headlines in recent months for its partnerships and regulatory progress.

In January, it signed a $1 billion deal with real estate giant DAMAC to tokenize assets. Mantra was also greenlighted to operate lawfully in the UAE after being granted a virtual asset service provider license by Dubai's VARA in February.

Even so, the crash has renewed earlier criticism of the project. Wu Blockchain, a popular X news channel, reposted a 2021 warning about Mantra's founding team, linking them to a gambling website and previous false investment claims.

Some traders have expressed concerns about transparency and exchange processes, comparing the crash to past collapses like that of Terra. As the dust settles on the unexpected crash, further analysis might reveal a more complete picture of the events that transpired.