Mantra’s current token collapse highlights a problem throughout the crypto trade of fluctuating weekend liquidity ranges creating extra draw back volatility, which can have exacerbated the token’s crash.
The Mantra (OM) token’s value collapsed by over 90% on Sunday, April 13, from roughly $6.30 to beneath $0.50, triggering market manipulation allegations amongst disillusioned traders, Cointelegraph reported.
Whereas blockchain analysts are nonetheless piecing collectively the explanations behind the OM collapse, the occasion highlights some essential points for the crypto trade, in keeping with Gracy Chen, CEO of the cryptocurrency alternate Bitget.
“The OM token crash uncovered a number of essential points that we’re seeing not simply in OM, but additionally as an trade,” Chen stated throughout Cointelegraph’s Chainreaction every day X show, including:
“When it’s a token that’s too concentrated, the wealth focus and the very opaque governance, along with sudden alternate inflows and outflows, […] mixed with the pressured liquidation throughout very low liquidity hours in our trade, created the massive drop off.”
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At the least two wallets linked to Mantra investor Laser Digital had been amongst 17 wallets that moved a mixed 43.6 million OM tokens — value about $227 million on the time — to exchanges earlier than the crash, the blockchain analytics platform Lookonchain reported on April 13, citing Arkham Intelligence information.
Nevertheless, Mantra CEO John Mullin denied the allegations associated to large-scale token transfers from Mantra traders, Cointelegraph reported on April 14.
Mantra released a post-crash assertion on April 16, reiterating that the OM crash didn’t contain token sales by the project itself and that the Mantra crew continues investigating the incident. The report didn’t clarify the speedy motion of OM tokens to exchanges and subsequent liquidations.
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Alternate actions level to robust “insider dumping” sign
Whereas the precise motive behind the collapse stays unclear, Mullin attributed the crash to “huge pressured liquidations” on centralized exchanges throughout low-liquidity hours on Sunday.
Mullin told an X person that the Mantra crew believes one alternate “particularly” is in charge, however stated the crew was nonetheless “determining the small print,” and specified that the alternate in query is just not Binance.
“I feel OKX was the primary alternate being accused of so-called liquidations,” stated Chen, including that the big transfers to a number of exchanges raised vital pink flags. She added:
“I did take a look at the onchain information, which revealed that there have been tens of millions of OM tokens moved to centralized exchanges. That’s a really robust sign of insider dumping.”
Weekend liquidity points have impacted even main cryptocurrencies like Bitcoin (BTC).
The shortage of weekend buying and selling quantity, mixed with Bitcoin’s 24/7 liquidity, resulted in Bitcoin’s correction beneath $75,000 on Sunday, April 6, Cointelegraph reported.
The April 6 correction might have occurred because of Bitcoin being the one massive tradable asset over the weekend accessible for de-risking amid world commerce battle considerations, Lucas Outumuro, head of analysis at crypto intelligence platform IntoTheBlock, informed Cointelegraph.
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