Mantra's OM Token Rebounds 200% After Crash, But Fears of LUNA-Like Collapse Linger

OM Token Stages Massive Comeback Following Weekend Collapse

Mantra’s OM token shocked the crypto markets over the weekend with a sudden 90% price crash, wiping out more than $5 billion in market capitalization and triggering nearly $76 million in liquidations of futures positions. However, the token staged a dramatic 200% rebound in the 24 hours that followed, rising from a low of $0.37 to as high as $1.10 by April 14.

OM/USDT daily price chart. Source: TradingView

The recovery came on the heels of a public statement from Mantra co-founder JP Mullin, who took to the project’s official Telegram to address mounting rug-pull allegations. “We are here and not going anywhere,” Mullin asserted, sharing a wallet verification address to demonstrate the team’s continued OM holdings.

Source: JP Mullin

Mullin attributed the flash crash not to malicious behavior, but rather to “reckless forced closures initiated by centralized exchanges.” Despite the explanation, the crypto community remains deeply skeptical of the project’s health and transparency.

Rug Pull Allegations Stir Controversy

The crash led to a storm of speculation online, with some commentators suggesting that the Mantra team—allegedly in control of up to 90% of the total OM supply—may have played a direct role in the collapse. According to crypto analyst Ed, large transfers of OM to centralized exchanges occurred just before the crash, raising red flags.

Source: AltcoinGordon

Ed further alleged that the team may have used OM tokens as collateral for high-risk loans on centralized platforms. When those exchanges, such as OKX, adjusted their risk parameters due to heightened market volatility, it may have triggered a margin call, leading to a cascade of forced liquidations.

Such adjustments are common risk-management tools for exchanges during volatile periods. OKX, in particular, reportedly revised its loan conditions following a major change in OM’s tokenomics back in October 2024.

Source: Ed

Inflationary Model Sparks Concern

The root of OM’s structural vulnerability may lie in its tokenomics update. In October 2024, Mantra doubled the OM token’s total supply from 888,888,888 to 1,777,777,777 and shifted from a capped model to an uncapped, inflationary structure. The new model introduced an 8% annual inflation rate, which critics argue devalues existing holdings and encourages speculative risk.

Following the crash, OKX CEO Star Xu did not hold back, labeling the Mantra situation a “big scandal” and promising to release a detailed report in the coming days.

Source: Wu Blockchain

Analysts Warn of Bull Trap: Echoes of LUNA Collapse

Despite the impressive 200% rebound, technical analysts are cautioning traders against optimism. OM’s price structure is starting to look eerily similar to that of Terra’s LUNA token, which famously crashed 99% in May 2022. LUNA’s brief post-crash recovery turned out to be a classic “bull trap” before plunging even further into obscurity.

Currently, OM remains well below its 50-week exponential moving average (EMA) near $3.25 and is struggling to break above the 200-week EMA resistance at around $1.08. Meanwhile, the weekly Relative Strength Index (RSI) sits at a weak 33.31—indicating fading momentum and the potential for further downside.

OM/USDT weekly price chart. Source: TradingView

Renowned chart analyst AmiCatCrypto echoed the caution, tweeting: “If you ask me if bull market is over. Short answer. YES. Any gains from this point is considered bounces.” She further predicted the possibility of OM plunging another 90% within a single day after this rebound phase concludes.

Community Divided: Is This the End or a New Chapter?

With emotions running high, the Mantra community finds itself divided. Some believe the team’s transparency and quick response signify resilience. Others argue the fundamental flaws in OM’s tokenomics, questionable centralization, and history of suspicious transfers spell doom for the token’s long-term viability.

LUNA/USD weekly price chart. Source: TradingView

Whether the OM rebound will evolve into a genuine recovery or prove to be the prelude to a deeper collapse remains to be seen. But as crypto markets have shown time and again—where there’s smoke, there may be fire.