Guys, yesterday we saw a fiery drop of the OM coin, which fell from about $6.30 to less than $0.50 in just a few hours, losing 90% of its value in the blink of an eye. This not only shook the market but turned the crypto markets upside down.
- **The Dramatic Drop:** The price of OM plummeted horrifically within a very short time. Trading platforms like Binance recorded a drop from $5.26 to $0.42 in 90 minutes, wiping billions of dollars off the market cap.
- **Forced Liquidation:** A devastating forced liquidation occurred, which was the main reason for the downward spiral. Major platforms abruptly closed investors' positions due to their margin decline, causing a severe panic in the market.
## The Official Reasons and the Behind-the-Scenes of the Drop
- **Statements from the Mantra Team:** The official team of the OM coin issued a statement confirming that the drop was due to significant forced liquidations executed by centralized exchange platforms at a time when liquidity was very low. The team clearly stated that the failure happened because of the timing and market conditions, with no direct intervention from the team.
- **Statements from the Co-Founder:** Co-founder John Patrick Mullen spoke on social media, stating that the team is not responsible for this large sell-off, assuring that they are still operational and working to fix the situation. However, the comments reflect a state of shock and disbelief – an unprecedented situation indeed.
## The Mechanism of Forced Liquidations and Their Impact
- **How Liquidations Work:** When a trader's margin falls below the required level, the platform begins to automatically close their positions to prevent the risk from spreading. In the case of OM, this was widely applied and had a significant impact on the currency's price.
- **Activity Data Before the Collapse:** Before the drop, there was unusual activity, with millions of OM coins being sent to major exchanges like OKX and Binance, which could be an indicator of major investors' readiness to sell.
Background on the Mantra Project
- **The OM Project and Mantra:** The project itself was discussing real asset tokens, attempting to bring traditional assets like real estate into the blockchain world. Before the collapse, it had significant partnerships and licensing from major authorities like VARA in Dubai.
- **Previous Sudden Surge:** The currency reached a peak of around $9 earlier in the year, meaning the drop that occurred is not just a sudden loss, but also a record fluctuation in its value.
Future Prospects and Lessons Learned
- **Legal Implications and Issues:** This collapse could lead to legal investigations, and law firms have already started studying the currency's structure and the massive transfers that occurred before the drop.
- **A Lesson for Investors:** What people need to take away from this story is that the cryptocurrency market is full of surprises and not everything always reflects the true fundamentals of the project. Investors must be very cautious and study market movements before throwing their money into a project.
In the end, the strong collapse of the OM coin reminds us that the cryptocurrency market is full of risks, and no matter how promising a project is, there should always be a thorough analysis of the situation and the market. I hope you found this episode beneficial and understood more about how such sudden drops can occur.
