Mantra bounces 200% after OM price crash but poses LUNA-like 'big scandal' risk

3 months ago

Mantra’s OM (OM) token staged a crisp rebound aft plunging 90% implicit the weekend, pursuing an progressive effect from the project’s squad addressing allegations of a rug propulsion scam.

OM bounces 200% arsenic co-founder addresses concerns

As of April 14, OM was trading for arsenic precocious arsenic $1.10, astir 200% higher erstwhile compared to its post-crash debased of $0.37 a time prior.

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

Co-founder JP Mullin reassured the assemblage that the task remains active, pointing to the authoritative Telegram radical being “still online.”

“We are present and not going anywhere,” Mullin wrote, besides sharing a verification code to beryllium the team's OM token holdings. He attributed the OM’s clang to “reckless forced closures initiated by centralized exchanges.”

The assurance calmed the OM token sell-off that had obliterated implicit $5 cardinal successful marketplace capitalization and liquidated $75.88 cardinal worthy of futures positions successful a day.

Numerous online commentators claimed the Mantra team, reportedly controlling 90% of the token supply, orchestrated the sell-off owed to suspicious OM transfers to centralized exchanges close earlier the crash.

Analyst Ed further alleged that the Mantra squad utilized their OM holdings arsenic collateral to unafraid high-risk loans connected a centralized exchange.

He noted that a abrupt alteration successful the platform’s indebtedness hazard parameters triggered a borderline call, contributing to the token’s crisp decline.

Exchanges set indebtedness hazard parameters to negociate marketplace volatility and support themselves from imaginable insolvency owed to falling collateral values. Centralized exchanges similar OKX person changed their parameters aft Mantra’s tokenomics update successful October 2024.

Notably, Mantra doubled the full proviso of OM tokens from 888,888,888 to 1,777,777,777 successful the said month. It further transitioned from a capped to an uncapped, inflationary exemplary with an archetypal 8% yearly ostentation rate.

OKX CEO Star Xu called Mantra a “big scandal,” adding that it would merchandise applicable reports regarding its clang successful the coming days.

OM bounce mightiness lucifer LUNA’s bull trap

OM’s 200% rebound from its $0.37 debased whitethorn look impressive, but its operation intimately resembles the classical bull trap signifier seen successful Terra’s LUNA debacle successful May 2022.

OM’s terms has crashed beneath the 50-week exponential moving mean (50-week EMA; the reddish wave) enactment adjacent $3.25 and is present investigating absorption astatine the 200-week EMA (the bluish wave) astatine astir $1.08.

Meanwhile, OM’s play comparative spot scale (RSI) has dropped to 33.31, signaling weakening momentum and expanding the hazard of different breakdown.

This setup powerfully mirrors LUNA’s post-crash behavior. After its crisp diminution successful May 2022, the terms staged a little betterment but failed to reclaim its 50-week and 200-week moving averages, triggering a deeper and much prolonged downtrend.

Just similar LUNA, OM present faces mounting skepticism contempt the impermanent bounce, with chartist AmiCatCrypto saying that the Mantra token tin plunge 90% wrong a time aft rallying for 100 days.

“If you inquire maine if bull marketplace is over. Short answer. YES,” she wrote, adding:

“Any gains from this constituent is considered bounces.”

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

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