Price Falls Below Resistance Despite Initial Rally
Mantra (OM) initially reacted well to May 9 recovery efforts, hitting an intraday high of $0.3923 during a general rally in the cryptocurrency market. The optimism was, however, short-lived. The token suddenly changed direction, closing the day at $0.3667 — down by 2.09% and erasing earlier gains.
OM’s failure to break the $0.4 resistance level is further proof of continued technical weakness. The token is trading below its 10-day and 20-day simple moving averages of $0.406 and $0.4666, respectively. Until OM recovers and stays above those significant moving averages, the general trend remains bearish.
Collapse Fallout Still Haunts OM
The recent price fall follows weeks of steady decline following OM’s breathtaking 95% collapse on April 13. That drop, which wiped out nearly all of Mantra’s market capitalization, still casts a shadow over the market.
The Mantra team initially blamed the collapse on exchanges’ mismanagement of liquidity. But blockchain sleuths like analysts Choze and Onchain Lens have pointed to huge transfers of funds from Mantra wallets to exchanges in the days leading up to the collapse — raising suspicions of insider selling.
Supply Centralization Raises Red Flags
Doubts regarding token distribution have only been encouraged. Up to 90% of OM’s entire supply can potentially be held by the Mantra team, and thus they have significant sway over the token’s market behavior, as revealed by Onchain Lens.
In an attempt to restore trust, CEO John Mullin has promised to burn 150 million staked OM — about 9% of the circulating supply. While the action is symbolic, most investors find it too little without greater transparency and accountability.
Until Mantra addresses the growing concern from its community, OM’s price reversal will be elusive.
