The significant price drop of the Mantra (OM) token in the past two hours can be attributed to several factors:
1. Profit-Taking After a Parabolic Rally: OM experienced an extraordinary surge in 2024, increasing by over 8,300%. Such rapid growth often leads to profit-taking as investors capitalize on gains, resulting in price corrections.
2. Overheated Market Conditions: Technical indicators, including the Market Value to Realized Value (MVRV) ratio, suggested that OM was in an overheated state, with values above 3.7 often preceding market corrections.
3. High Open Interest and Increased Volatility: A significant rise in futures open interest, reaching approximately $428.79 million, indicates increased speculative activity. This can lead to amplified price movements, contributing to recent volatility.
Given these factors, the recent price decline appears to be a natural correction following a period of rapid appreciation.
