The $OM token plummeted by 90% in just 1 hour – nearly $5.5 billion was 'wiped out' from the market.
What happened and why could that happen? Let's analyze.
The story began yesterday when the team behind the $OM project deposited 3.9 million OM tokens on the OKX exchange.
It’s worth noting that the $OM development team is said to hold nearly 90% of the total token supply, and throughout the past year, they have actively used market makers to maintain the token price.
Not only that, but they also adjusted the tokenomics and postponed airdrop rounds for the community – actions that have caused much controversy in the investment community.
Right after a large amount of tokens were deposited into OKX, a wave of selling began today.
But what caused the price $OM to drop by 90% in just one hour?
The focus lies in OTC (over-the-counter) transactions. There are rumors that $OM has executed some OTC agreements at prices up to 50% lower than the market – or even more.
When the price of $OM on the market plummeted by 50%, OTC investors began to incur heavy losses, creating a cascading effect. People rushed to sell off to 'get out' as soon as possible.
As a result, a wave of liquidations and widespread sell-offs occurred, pushing the price down to unimaginable lows.
What’s the lesson learned?
Always do thorough research before investing – especially with projects that have a highly centralized token distribution structure like this.