This morning in the crypto markets, the umpteenth implosion occurred: the price of Mantra (OM) went from more than $6 to less than $0.6 in a matter of hours.
In fact, the actual collapse lasted only 65 minutes, when it went directly from $5.2 to $0.48.
OM: the crypto of the Mantra project
OM is the native cryptocurrency of the Mantra blockchain. However, it is also available as a token on several other blockchains, including Ethereum, BSC, and Base.
He landed on the crypto marketts in 2020, so he went through the great bull run of 2021, when it reached a historic maximum price above 0.7$.
Note that it had debuted less than a year earlier at $0.4, so during that bullrun the price performance of OM in percentage terms was lower than that of many other tokens.
During the subsequent bear-market, it had plummeted to $0.03, and in 2023 the decline continued to below $0.02, which meant a -98% from the highs that was not promising.
However, during 2024 the price had first returned to its all-time highs, even before the electoral victory of Trump, and then thanks to the Trump trade it had marked an incredible rally that had even taken it above $9.
So after a trivial +120% initially, in 2021, it recorded a -98% over two years, completely recovered in the following year, and followed by an incredible +490% in just three and a half months.
At that point, however, the bubble burst.
The sudden crash of the crypto OM (Mantra)
After briefly surpassing $9 on February 23, the bubble did not immediately burst.
In fact, in March the price of OM had fallen below $6.3, and even yesterday it was more or less at that level.
There was no sign of a possible implosion, even though yesterday at one point the price dropped to $6.2, and then even below this threshold.
The real collapse began when it fell below $6.1, although it still took almost two hours to drop below $5.3.
However, when they no longer held the $5.2 the bubble burst suddenly, bringing the price of OM suddenly below the starting level of the end of October 2024.
It was, in short, a sort of sudden burst live of a speculative bubble that lasted four months.
At this point, it is still not clear whether the burst will only leave the price of OM where it started to inflate the bubble due to the Trump trade, or if it will continue further, because the risk of additional declines exists.
The RWA project of layer-1 Mantra
MANTRA is a decentralized finance platform that aims to prioritize security and regulatory compliance.
In particular, it has been designed to facilitate the tokenization and trading of real-world assets.
It was created on the Cosmos SDK, it is compatible with IBC and supports CosmWasm.
It is a permissionless blockchain environment that also allows permissioned applications, making it suitable for institutional use (in theory).
Before today’s crash, the TVL of DeFi on Mantra was over 4.2 million dollars, while afterwards it fell to 3.2 million. It is not a real crash because that TVL is composed not only of OM, but also of stablecoins.
It should be noted, however, that from the 7.7 million dollars of stablecoin on Mantra in January, this parameter had already dropped to 2.5 million just as OM was reaching its all-time highs. Even today, the total value of stablecoin on Mantra is 2.3 million dollars.
Compared to other chains, these are still very low values, and even OM before the crash was capitalizing less than 6 billion dollars, which is less than Bitcoin Cash, to be clear. Now, however, the capitalization has collapsed to less than 700 million, which has caused it to plummet to the 82nd place from this point of view.
The causes of the implosion of the crypto OM (Mantra)
Certainly the implosion is due to the burst of the November bubble, which continued to inflate until well into February.
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According to the analyses by Binance, the collapse would have been triggered by liquidations among exchanges, but according to the CEO of OKX, Star Xu, it would be a major scandal for the entire crypto sector.
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Mantra DAO has released a statement claiming that the market movements of OM were triggered by reckless forced closures initiated by centralized exchanges. Since this occurred during the low liquidity hours of a Sunday evening UTC, the result was catastrophic, to the point that the Mantra DAO suggests a certain degree of negligence or perhaps an intentional market positioning adopted by the centralized exchanges.
It’s curious to note how a “DAO”, which should be decentralized, can make statements like any centralized entity, to shift the blame onto others.
It should be remembered that forced liquidations, if executed correctly, are acts required by exchanges, unpredictable, and automatic. Therefore, in theory, they should have been triggered simply by a quick drop in price from $6.3 to less than $5.2 during a moment of low liquidity. Furthermore, it is unlikely to be a coincidence that such a price implosion brought it back exactly to the point where the bubble started to inflate in November.
