Why Mantra’s 90% Drop Shocked the Market and Wiped Out $5.5 Billion in Market Share

After dropping 90% from $6.33 on Monday, Mantra’s OM token has held steady at $0.83 during Asian trading hours. This massive drop, which erased $5.2 billion in market value, quickly drew comparisons to the historic crashes of Terra LUNA and FTX in 2022. Amid suspicions of suspicious token trades, the Mantra team faced accusations of insider trading. Built for organizations and developers, Mantra is a Layer 1 blockchain prioritizing security for Real-World Assets (RWA). Now, after its OM token plummeted by 90% on Sunday, all eyes are on the project. According to Coinglass data, the crisis triggered $68.86 million in liquidations within 24 hours, with long positions losing the most at $49.68 million, while short positions lost $19.18 million. Many in the crypto community raised concerns about the drop, with some claiming that the Mantra team controls 90% of the token supply and could have planned the sell-off. Whales’ Moves Before the Collapse A group of OM whales transferred 14.27 million OM, worth nearly $91 million, to OKX three days before the collapse at an average price of $6.375, according to research from SpotOnChain, a crypto transaction tracking site. Furthermore, these whales had purchased 84.15 million OM on Binance in March, worth around $564.7 million, at an average price of $6.711. SpotOnChain noted, “They might have hedged their positions elsewhere and could have contributed to the sharp drop,” even though their remaining balance of 69.08 million OM dropped to $62.2 million. Another wallet tracker, Lookonchain, pointed out that at least 17 wallets transferred 43.6 million OM, worth about $227 million at the time, to exchanges. This large transfer, accounting for 4.5% of Mantra’s total token supply, was tied to two entities directly linked to strategic investors in Mantra, Laser Digital. In response to these claims, the Mantra team stated that the project “remains fundamentally strong” and that the disaster on Sunday was not related to project management but was caused by “reckless liquidations.” What’s Next for Mantra? Given the ongoing trade conflicts, it’s unclear what triggered the devastating drop that left many traders and investors deep in losses. The Mantra team has committed to investigating the issue and will provide more details on what happened. The drop could have been caused by a combination of factors, including structural issues, claims that the team controls 90% of the token supply, large token transfers to exchanges, over-the-counter (OTC) sales, and aggressive liquidations. Based on the Relative Strength Index (RSI), Mantra’s OM token shows significant sell-offs on the daily chart, indicating that sellers are in control as buying momentum waned on Monday. With the MACD oscillating around -0.3007, the Moving Average Convergence Divergence (MACD) confirms a downward trend. Mantra’s future success hinges on the next few days, so traders may want to exercise patience. A report from the team may help clarify the reasons behind the token’s sharp drop, possibly paving the way for a recovery. However, with growing concerns about market manipulation, it’s wise to expect multiple possible outcomes, including continued downward movement. #CryptoForBeginners #CryptoInvestingTips #LearnCrypto #BeginnerCryptoGuide #HowToInvestInCrypto