How Mantra (OM) Coin Price Can Recover? A Scenario

The recent collapse of Mantra (OM) has shaken investor confidence. Within just one week, OM plummeted from around $6.41 to a shocking low of $0.69 a staggering 90% drop. Now, both investors and traders are left wondering how Mantra (OM) can recover and whether there's a roadmap back to price stability and trust.

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What Triggered the Mantra (OM) Crash?

While initial speculation pointed to a potential rug pull or insider dumping, the Mantra team, led by CEO John Mullin, denied any foul play. Instead, Mullin attributed the price collapse to a “technical domino effect.” OM, heavily used as collateral for loans, began to fall in price, triggering automated liquidations across multiple centralized exchanges (CEXs). This cascade effect, compounded by low liquidity, created a downward spiral.

Additionally, OM’s reliance on centralized exchange volume over on-chain liquidity amplified its vulnerability. Over 75% of the trading volume during the crash originated from CEXs, indicating how off-chain activity dominates OM’s trading behavior.

Technical Indicators Remain Bearish

From a technical analysis perspective, OM remains deep in bearish territory. The Relative Strength Index (RSI) sits near 36.97, close to being oversold, while trading volume continues to decline. The MACD confirms this downtrend, showing no signs of upward momentum.

Price action has failed to reclaim critical psychological levels, especially the $1.00 resistance zone. Unless OM can regain and hold above this level with increased trading volume, the token risks further downside or prolonged stagnation.

On-Chain Metrics Offer a Glimmer of Hope

Despite the grim short-term outlook, on-chain data tells a more resilient story. Mantra’s Total Value Locked (TVL) has remained stable at around $342.2 million. This indicates that core DeFi users and stakers did not panic. In fact, over 50% of OM’s current market cap is staked, suggesting long-term holders remain committed.

Furthermore, Mantra still holds a significant on-chain borrowing position of $199 million. Although this introduces the risk of more forced liquidations, it also signals the platform's active usage in DeFi ecosystems across Ethereum, Base, and Polygon.

Mantra’s Recovery Plan: Can It Work?

In an effort to reverse the damage, CEO John Mullin announced a series of recovery measures. These include a buyback and token burn plan to reduce circulating supply and boost scarcity. Additionally, a $109 million ecosystem fund will be used to incentivize partnerships, development, and marketing efforts.

While promising, these initiatives need to be backed by clear communication and swift execution. How Mantra (OM) responds in the coming weeks will determine whether trust can be rebuilt or if the damage is irreversible.

Scenarios for Recovery

Here are some realistic scenarios where Mantra (OM) could regain value:

1. Successful Token Burn: Reducing circulating supply through consistent burn events may help push the price back above key resistance levels.
2. Ecosystem Fund Utility: Strategic partnerships or dApp launches backed by the $109M fund could renew market interest.
3. Improved Liquidity: Encouraging on-chain liquidity across platforms could minimize CEX dependency and create a healthier trading environment.
4. Staking Incentives: Enhancing staking rewards or introducing time-locked incentives may reinforce long-term holder engagement.
5. Transparent Communication: Frequent and honest updates from the team could help rebuild credibility within the community.

Read also : OM's CEO Plans to Burn His Token Allocation After Mantra Market Crash! An Effort to Keep Trust Alive

Conclusion: Is This the Bottom or Just the Beginning?

The crash of Mantra (OM) serves as a wake-up call for both the team and investors. While the price collapse has exposed vulnerabilities particularly centralized exchange reliance and thin liquidity there are still building blocks in place for a potential recovery.

With a strong staking base, steady TVL, and a proactive recovery plan, the OM token may not be down for the count just yet. However, the next few weeks will be critical. Execution, transparency, and community trust are the only paths forward for OM to re-establish itself in the market.

As crypto continues to mature, how Mantra (OM) navigates this crisis could turn into a textbook case of either rebound or ruin.

FAQ

What caused the sudden price crash of Mantra (OM)?

The sharp decline in Mantra (OM)’s price was mainly triggered by automated liquidations across centralized exchanges. As OM's price dropped, it caused cascading sell-offs due to its use as collateral in leveraged positions. Low liquidity and panic trading further accelerated the crash. Mantra’s team denied any insider manipulation or rug pull, citing technical factors instead.

How can Mantra (OM) recover from this 90% crash?

Recovery is possible through a combination of strategies: executing a buyback and burn plan, utilizing a $109 million ecosystem fund to boost partnerships and utility, improving on-chain liquidity, and increasing transparency. Regaining trust and trading volume above key resistance levels, especially $1.00, is also essential for recovery.

Is Mantra (OM) still a safe investment after the crash?

Mantra (OM) remains a high-risk, high-reward asset. While technical indicators are bearish, on-chain metrics show resilience—TVL is stable, and over 50% of the supply is staked. Whether OM becomes a safe investment again depends on how well the team executes recovery plans and rebuilds investor confidence in the coming weeks.