OM (OM) token staged a sharp rebound after plunging 90% over the weekend

As of April 14, OM was trading for as high as $1.10, almost 200% higher when compared to its post-crash low of $0.37 a day prior.

Mantra’s (OM) (CRYPTO: OM) token staged a sharp rebound after plunging 90% over the weekend, following an active response from the project’s team to allegations of a rug pull scam.

What Happened: As of April 14, OM was trading for as high as $1.10, almost 200% higher when compared to its post-crash low of $0.37 a day prior.

The rebound came after Mantra addressed mounting rug-pull allegations.

Co-founder JP Mullin reassured the community that the project remains active, pointing to the official Telegram group being “still online.”

“We are here and not going anywhere,” Mullin said, also sharing a verification address to prove the team's OM token holdings. He attributed the OM’s crash to “reckless forced closures initiated by centralized exchanges.”

"Is the telegram still active ? Yes

Is the website still online ? Yes

Can you verify our address ? Yes

We are here and not going anywhere

We are still in contact and working hard to resolve this mess

The forced closure was reckless and chaotic

Hope this helps https://t.co/0p2a3ef8gP pic.twitter.com/183qB6c66Z

— JP Mullin (@jp_mullin) April 13, 2024

The assurance calmed the OM token sell-off that had obliterated over $5 billion in market capitalization and liquidated $75.88 million worth of futures positions in a day.

Several online commentators claimed that the Mantra team, reportedly controlling 90% of the token supply, orchestrated the sell-off due to suspicious OM transfers to centralized exchanges right before the crash.

Mantra team allegedly controls 90% of the token supply. They started transferring tokens to CEXs yesterday.

It seems they planned this move all along. As the token price crashed, huge amounts of futures positions got liquidated. Notably, nearly $75.88M in futures positions were liquidated today. $OM https://t.co/h7a84Y6u8c

— AltcoinGordon (@AltcoinGordon) April 13, 2024

Analyst Ed further alleged that the Mantra team used their OM holdings as collateral to secure high-risk loans on a centralized exchange.

He said that a sudden change in the platform’s loan risk parameters triggered a margin call, contributing to the token’s sharp decline.

“[Centralized exchanges] adjust the loan risk parameters to manage market volatility and protect themselves from potential insolvency due to falling collateral values. Several times they do modify the parameters, but usually, they prefer to maintain them,” Ed said.

Centralized exchanges like OKX have changed their parameters after Mantra’s tokenomics update in October 2024.

The platform doubled the total supply of OM tokens from 888,888,888 to 1,777,777,777 in the said month. It further transitioned from a capped to an uncapped, inflationary model with an initial 8% annual inflation rate.

OKX CEO Star Xu called Mantra a “big scandal,” and said that they would release relevant reports regarding the crash in the coming days.

"Mantra is a big scandal. We will post relevant reports in the next few days."

OM Bounce Might Resemble LUNA’s Bull Trap

While OM’s 200% rebound from its $0.37 low may look impressive, its structure closely resembles the classic bull trap pattern seen in Terra’s (CRYPTO: LUNA) debacle in May 2022.

The price has crashed below the 50-week exponential moving average (50-week EMA; the red wave) support at around $3.25 and is now testing resistance at the 200-week EMA (the blue wave) at around $1.08.

The weekly relative strength index (RSI) has dropped to 33.31, signaling weakening momentum and increasing the risk of another breakdown.

This setup strongly mirrors LUNA’s post-crash behavior. After its sharp decline in May 2022, the price staged a brief recovery but failed to reclaim its 50-week and 200-week moving averages, triggering a deeper and more prolonged downtrend.

Afterthoughts

The story continues to unfold, and it's clear that there's no easy answer. However, it's important to stay informed and make informed decisions with your own cryptocurrency investments. As for me, I'm still interested to see how this plays out and what the full scope of the scandal might be.