OM token crash exposes “critical” liquidity issues in crypto

Crypto investor sentiment took another significant hit this week after Mantra's OM token collapsed by over 90% within hours on Sunday, April 13, triggering knee-jerk comparisons to previous black swan events such as the Terra-Luna collapse.

Crypto investor sentiment took another significant hit this week after Mantra’s OM token collapsed by over 90% within hours on Sunday, April 13, triggering knee-jerk comparisons to previous black swan events such as the Terra-Luna collapse.

Elsewhere, Coinbase’s report for institutional investors added to concerns by highlighting that cryptocurrencies may be in a bear market until a recovery occurs in the third quarter of 2025.

Mantra OM token crash exposes ‘critical’ liquidity issues in crypto

Mantra’s recent token collapse highlights an issue within the crypto industry of weekend liquidity levels creating additional downside volatility, which may have exacerbated the token’s crash.

The Mantra (OM) token’s price collapsed by over 90% on Sunday, April 13, from roughly $6.30 to below $0.50, triggering market manipulation allegations among disillusioned investors, Cointelegraph reported.

While blockchain analysts are still piecing together the reasons behind the OM collapse, the event highlights some crucial issues for the crypto industry, according to Gracy Chen, CEO of the cryptocurrency exchange Bitget.

“The OM token crash exposed several critical issues that we are seeing not just in OM, but also as an industry,” Chen said during Cointelegraph’s Chainreaction daily X show, adding:

“We can see that the market depth on weekends is usually lower compared to weekdays, which may create additional downside volatility in times of market distress.”

The lack of deeper market liquidity on the weekend may have also contributed to the difficulty in stabilizing the token’s price after the steep drop.

“We saw that the recovery of the OM token was slow due to the lack of buyers at lower prices. This is a common issue in bear markets, where sellers are more eager to sell than buyers are to buy.”

However, Chen noted that the crypto industry is still relatively young and constantly evolving.

“We need to stay informed and engaged to navigate the challenges and opportunities that lie ahead.”

Crypto in a bear market, rebound likely in Q3 — Coinbase

A monthly market review by publicly traded US-based crypto exchange Coinbase shows that while the crypto market has contracted, it appears to be gearing up for a better quarter.

According to Coinbase’s April 15 monthly outlook for institutional investors, the altcoin market cap shrank by 41% from its December 2024 highs of $1.6 trillion to $950 billion by mid-April. BTC Tools data shows that this metric touched a low of $906.9 billion on April 9 and stood at $976.9 billion at the time of writing.

Venture capital funding to crypto projects has reportedly decreased by 50%-60% from 2021-22.

In the report, Coinbase’s global head of research, David Duong, highlighted that a new crypto winter may be upon us.

“Several converging signals may be pointing to the start of a new ‘crypto winter' as some extreme negative sentiment has set in due to the onset of global tariffs and the potential for further escalations,” he said.

Some of the key takeaways from the report include:

The crypto market is still in a bear market with the altcoin market cap shrinking by 41% from its 2024 highs.

Coinbase anticipates a rebound in the third quarter of 2025.

Global macroeconomic and geopolitical uncertainty continues to weigh on market sentiment.

According to BTC Tools data, the Bitcoin (BTC) price hovered around $47,000 at the time of writing, remaining largely unchanged over the past week. BTC’s price has fallen by around 10% since the beginning of the year.

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