In a striking turn of events, Mantra’s OM token has rebounded by an impressive 200% after a staggering 90% crash over the weekend. The price movement, however, raises eyebrows as it mirrors the notorious collapse of Terra’s LUNA. The recent allegations of a rug pull scam have sparked significant concerns within the cryptocurrency community, prompting the project’s co-founder JP Mullin to step forward and address the accusations head-on.
As of April 14, the OM token was valued as high as $1.10, almost double its post-crash low of $0.37 just a day prior. This rebound was largely fueled by Mullin’s reassurances about the integrity of the project. He emphasized that the official Telegram group remains active, reassuring investors that the project is not in jeopardy. “We are here and not going anywhere,” he stated, while also providing a verification address to prove the team’s holdings of the OM token. However, doubts still loom regarding the team’s control over 90% of the token supply, leading many commentators to suspect a deliberate orchestrated sell-off.
Following the allegations, expert analysts have begun to dissect the token’s troubling situation. One such analyst pointed to claims that the Mantra team leveraged their OM tokens as collateral for high-risk loans on centralized exchanges. This aggressive strategy, combined with a sudden shift in loan risk parameters, triggered a margin call, contributing to the catastrophic price decline.
The manipulation of loan parameters by exchanges is designed to mitigate risks associated with falling collateral values. Centralized exchanges like OKX have started adjusting these parameters in response to Mantra’s recent tokenomics modifications, notably doubling the total supply of OM from 888,888,888 to 1,777,777,777 and transitioning to an inflationary model.
Despite the current rally, many analysts hint that the rebound resembles a classic bull trap, similar to what occurred with LUNA after its collapse in May 2022. OM’s price has plummeted below critical moving averages, and the token’s weekly relative strength index (RSI) has dropped to 33.31, indicating a significant risk of further breakdown. Historically, similar patterns have led to deeper, prolonged downtrends after brief recoveries.
The skepticism surrounding OM’s recovery is palpable, with some experts predicting another steep decline. A known chartist noted, “If you ask me if the bull market is over. Short answer. YES. Any gains from this point is considered bounces.” This sentiment echoes the lingering fear and uncertainty within the cryptocurrency market regarding Mantra’s future.
In conclusion, while the recent bounce of Mantra’s OM token may appear encouraging, the underlying circumstances cast a shadow on its sustainability. As the situation unfolds, investors must proceed with caution, conducting thorough research before making any further investment decisions in this volatile market.
Disclaimer: This article does not constitute investment advice. Every investment and trading move involves risks, and readers are encouraged to conduct their own research.
