Analysis of the 90% crash of the #om token event: A warning and reflection behind a "reckless liquidation!"

In the early hours of the 14th, MANTRA's OM token experienced an epic collapse, plummeting from $5.21 to $0.5 with a decline of over 90%, causing market shockwaves. Although the team attributed the cause to the "disorderly liquidation by large investors," the event exposed project risks, suspicions of market manipulation, and industry chaos.

1. Official Explanation and Market Doubts

1. The MANTRA team claims the crash was triggered by "large investors facing forced liquidation on CEX," leading to liquidity exhaustion and price crashes. However, the market questions that the root cause is the serious inversion of TVL ($13 million) against the fully diluted valuation of $9.5 billion, indicating obvious bubble characteristics.

2. On-chain data shows that multiple whale addresses transferred millions of OM tokens to OKX and Binance before the crash, and suspiciously transferred them back to exchanges before the crash, indicating potential sell-off. The project was exposed for having the team control 90% of the token circulation, further intensifying suspicions of manipulation through means such as locked-up OTC trading.

2. Chain Reaction of the Crash

1. Market-making algorithms' "misjudgment" exacerbated volatility; OM's flash crash triggered a 20% abnormal rise in Binance's perpetual contract prices, exposing the vulnerability of algorithmic trading in extreme market conditions.

2. During the crash, the official MANTRA Telegram group was briefly closed, and the community leader's initial response was vague, avoiding responsibility. Although the team later promised an investigation, market confidence was severely damaged, raising doubts about the project's transparency and crisis management capabilities.

3. Deep Warning from the OM Incident

1. Beware of "overvalued, low TVL" castles in the air; the OM case is a typical example of a value bubble token with inflated valuations and weak actual ecosystem support. Focus on project fundamentals such as TVL, user activity, and revenue models, rather than blindly chasing market cap rankings.

2. If the project party or a few addresses control the majority of the token circulation, prices can be easily manipulated. Use on-chain data (such as DeFiLlama, Arkham) to track large holders' positions and identify risks in advance.

3. Leverage trading amplifies profits in a bull market, but in a bear market or with insufficient liquidity, forced liquidation can trigger a chain collapse.

Historical Lesson: Familiarity in the cryptocurrency market; the 85% crash in '24 caused by Jump Trading and other market makers' sell-offs led to a market collapse, and the OM event once again confirms the absolute influence of leading players on prices. Even industry leaders like Intel's chip have seen an 85% drop, and the high volatility of the crypto market requires respect.