Mantra's -90% Liquidation event: Why Market-Wide Danger Looms

Last night (April 13th) the Mantra (OM) project saw its market capital drop from $6.11B to $419m!

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From the team
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JP Mullin (CEO of @MANTRA_Chain) remarks at BTCON RWA Summit today on OM price action overnight

• No exploit or hack
• No active selling from MM or investors
• Large investors using OM as collateral were liquidated, which caused drastic price action
• No profit taken from insiders including team members”


After the 95% correction they said:
“We want to assure you that MANTRA is fundamentally strong.”

Would you say that if Apple dropped 95% overnight?



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The Official reason – A liquidation event
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“There was a massive, forced liquidation from a large OM investor on a CEX. Still working on the details, but we are here, and we're fixing this.”




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Could Technical analysis have foreseen this?
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The correction depth? No, targets like this cannot be forecast. However, the loss of support and market structure was evident on March 26th. Price action was up 450x at this point, greed is the only reason profits were not taken.

If indeed investor confidence has not be destroyed from such an event, look for support around 30 cents. There is no recovery from an event like this until a significant consolidation period.



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Why is this a danger to the whole market?
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Have never be shy on the fact the entire crypto space is a Ponzi scheme. A promise you can make wealth from speculation. The outsized use of leverage compared to spot makes that evident. The number of messages Without Worries continues to receive from folks who have lost meaningful sums of money using Leverage and Futures products has been constant over the past several years. It is frustrating as it is heartbreaking.

If a liquidation event can cause a spot market to drop 95% then the question is, can this happen elsewhere?

369.78K - That was the trading volume for Bitcoin across the entire market these past 24hrs.

528.185K - The current amount of Bitcoin held by Micro Strategy on Leverage.
Average Cost per BTC: $67,458.00 or just $17k below current market prices.

strategytracker.com/mstr/?chart=performance-comparison&timeRange=year

"Michael Saylor's company was on a Bitcoin buying spree. Soon it might need to sell"
qz.com/saylor-hodl-strategy-sell-btc-1851775794

If debtors demand repayment of their loans to Micro strategy, loans that used his Bitcoin as collateral (the irony), forced Bitcoin liquidation has to occur. This fund could wipe out the 24hr trading volume with ease. What do you think such an event would do the whole market?

The recent events on Mantra serves as an excellent example of why the spot market is no longer in control of price discovery. This is a fully fuelled leveraged bubble approaching margin call.

Stay safe, stay wise, and stay away from leverage!
Ww