OM Token Collapse : Uncovering a Large-Scale Manipulation Scheme
When the MANTRA token (OM) collapsed a few days ago, many questions were left unanswered. Allegations of misconduct and rumors of suspicious activities quickly tarnished the company’s reputation.
According to a new analysis, the trigger for this collapse was a single trader. “This was caused by an entity on Binance’s perpetual market. This set off the entire cascade. The initial drop below $5 was triggered by a short position of about $1 million that was sold on the market. This led to over 5% price slippage in a few microseconds. That was the trigger. It seems intentional to me. They knew what they were doing,” explained the analyst.
OM Trading Anomalies. Source: TradingView
After causing this initial anomaly, the trader continued to liquidate their short positions at five-second intervals, fueling the overall collapse. As these successive sales continued on Binance, the OKX spot market recorded a discount of nearly 20%.
When One Trader Can Tip the Scales of a Market
This peculiar behavior on OKX was caused by a massive whale. By placing a limit order for sale, the seller was able to specify the minimum price at which they were willing to part with their OM tokens. This order only executes when the market price reaches or exceeds this threshold. Meanwhile, the order remained open in the order book.
This individual successfully kept the price stable on OKX for over a minute, enticing market makers and arbitrage bots to buy the assets despite the panic in the broader crypto market. In this manner, the manipulator was able to get rid of their OM tokens while the collapse was ongoing.
Therefore, the issue is not that OM collapsed due to a malicious actor seeking to cause a catastrophe. The real concern is that a single entity could manipulate the markets to such an extent. For such an attack to work, the seemingly high liquidity of the OM token had to be much more fragile than anticipated.
As highlighted by an expert, “many people hesitate at the idea that meme tokens could reach billions, or even the dream of $100 billion. Many forget that the majority of retail investors, even with good degrees and high IQs, think a token at $0.00001 is cheaper than one at $0.10. They don’t understand market capitalization.”
