OM rallies over 10%, top gainer of the day

Mantra (OM) surged by 10% on October 28, following the formation of a “god candle” on its daily chart, pushing its price from $1.26 to $1.46 and increasing its market cap to $1.22 million. This rally marks a 66% increase from its September low, with OM now trading at $1.40.

The surge in Mantra’s price comes with a three-fold increase in daily trading volume, surpassing $92 million, most of which occurred on Binance.

Key Catalysts Behind the Rally

1. Launch of MANTRA Chain Mainnet: The recent mainnet launch on October 23 is a significant factor, enabling users to bridge OM tokens from other blockchains to the MANTRA Chain Mainnet. This has allowed staking, providing users with staking rewards and a higher APR than Ethereum, which has prompted a wave of users migrating their tokens. Over 1 million OM tokens have already been bridged to the mainnet.
2. Upcoming OM Airdrop: The OM airdrop is also driving excitement. As part of the Mantra Zone competition, 50 million OM tokens will be airdropped to ATOM stakers on the MANTRA Chain mainnet, fueling more hype and interest in the token.

Market Sentiment and Indicators

• Open Interest Surge: CoinGlass data reveals a 43% rise in open interest for OM futures, reaching $44.66 million, indicating growing interest from short-term traders.
• Negative Funding Rate: OM’s weighted funding rate has dropped into the red zone at -0.0534%, signaling potential short liquidations that could drive the price higher.

Future Outlook

Analysts are bullish on OM’s prospects. CryptoBull_360 speculates that OM could retest its all-time high of $1.61, representing a 13% gain from current levels, if its trading volume continues to rise.

Another analyst, Altcoin Sherpa, shared a positive outlook but cautioned that Bitcoin’s performance could play a pivotal role in the further direction of the rally, emphasizing the need to keep an eye on the broader market sentiment.

Overall, Mantra (OM) appears poised for further growth, driven by strong fundamentals such as the mainnet launch, staking rewards, and the upcoming airdrop, although market conditions and Bitcoin’s performance will remain key factors to watch.

Technical indicators

On the daily chart, the Relative Strength Index (RSI), which had previously entered overbought territory on October 14, has since cooled off and stabilized at a neutral level of 50 as of October 28. This typically suggests that a short-term price correction is unlikely at this moment.

The Average Directional Index (ADX), a key indicator for trend strength, has also risen to 32, signaling that the current uptrend remains strong with significant momentum.

However, despite the positive technical indicators, there are concerns for holders. IntoTheBlock data shows a notable increase in the net inflow of large OM holders moving their tokens to exchanges. On October 20, the inflow was 112.4k OM tokens, but this surged to 6.21 million OM tokens (worth approximately $8.9 million) by October 28. This influx of whale-sized transfers to exchanges is often viewed as a precursor to potential selling pressure.

The situation is further complicated by the fact that whales control 63% of OM’s total supply, and with 95% of holders currently in profit, there’s a higher likelihood of a sell-off if these large holders decide to cash in on their gains. This could present a risk to the token’s price if the whales decide to liquidate their positions.

In summary, while OM shows strong bullish signs on the technical charts, the movement of large holders’ assets to exchanges could indicate potential selling pressure, which investors should keep an eye on as a possible risk factor.