A sharp decline of the Story token, 25% in just one hour, triggered concerns about a repeat of the Mantra crash.

The latest Story (IP) price drop has traders concerned over a repeat of the Mantra (OM) crash. Notably, on April 14, the IP token was down from $4.24 to a daily low of $3.02.

A sharp decline of the Story token, 25% in just one hour, triggered concerns about a repeat of the Mantra crash.

Story (IP) token traders were left scratching their heads on April 14 as the latest price drop raised concerns over a repeat of the Mantra (OM) crash.

In particular, the IP token was trading down from $4.24 to a daily low of $3.02. As of press time, the token had recovered to $3.73. However, in just one hour, the token registered a 25% price drop.

Moreover, traders on social media linked the Story crash to the recent Mantra token crash, which saw the token lose 90% of its value and $5 billion in market cap the same day.

According to crypto journalist Colin Wu, most of IP’s trading volume was concentrated in Binance Futures and OKX spot markets, the same platforms implicated in the Mantra crash. After the sudden drop, both exchanges issued conflicting explanations.

Lower liquidity can hurt projects like Story

One Binance confirmed with Mantra CEO who blamed forced liquidations on several exchanges. These can happen in times of low liquidity, where sharp changes in prices on the futures market result in liquidations of big positions, which in turn put more pressure on the spot market.

However, OKX stated that Mantra made changes to its tokenomics model. The exchange also noted major token deposits to several centralized exchanges, an explanation that aligned more with that of independent investigators who claimed that insider selling was more likely.

For smaller projects like Story and Mantra, both low liquidity and insider selling can be a source of significant volatility.

According to a report by Kaiko research, the sudden crash of the Mantra token resulted in $21 million in liquidations of long positions, which exacerbated price pressures.

While Story recovered, the sudden crash highlighted the volatility risks of smaller tokens. In a situation of low liquidity, a few big trades can cause major price moves.