Mantra (OM) Hits New All-Time High Amid Broader Market Decline, But Whale Activity Suggests Potential Correction

Mantra (OM), the native token of the Mantra Layer-1 blockchain, has been on a remarkable upward trajectory, posting impressive gains despite a slight decline in the broader cryptocurrency market. Over the past week, OM surged by 137%, reaching an all-time high (ATH) of $3.42 on Sunday before slightly cooling to $3.34 at the time of writing. With a market cap of $2.85 billion, it now ranks as the 38th largest cryptocurrency.

Key Drivers of Mantra’s Price Surge

Several factors have contributed to Mantra’s significant price increase:

1. Google Cloud Partnership: A major catalyst for the recent surge in OM’s price was its partnership with Google Cloud, announced in late October. This strategic collaboration has likely bolstered investor confidence in the project, contributing to the price rally.
2. Increased Whale Inflows: On November 14, there was a noticeable uptick in whale activity, with large investors (whales) increasing their holdings of OM. This added fuel to the bullish sentiment surrounding the token, helping drive the price to new heights.

However, despite these positive developments, there are some warning signs from on-chain data that could indicate a potential correction.

Whale Profit-Taking Signals Possible Selloff

While Mantra’s price has been rising, recent data suggests that whale accumulation of OM has begun to slow. According to IntoTheBlock (ITB) data, the large holder net inflow of OM declined from 2.96 million OM on November 14 to 1.8 million OM on Saturday. This slowdown in whale purchases could indicate that large investors are starting to take profits after the token reached new all-time highs.

Moreover, the number of OM daily active addresses in profit has been increasing sharply. ITB data shows that the number of unique wallets in profit rose from just 27 on November 13 to 297 the following day. Given that a significant portion of the Mantra supply is held by whales (94% of the circulating supply), this uptick in profit-taking by large holders could signal the start of a potential selloff.

Short-Term Traders Pose a Risk to Stability

Another factor contributing to the risk of a potential correction is the large percentage of short-term holders. ITB data reveals that over 24% of Mantra addresses have held OM for less than a month, and 43% have accumulated the token in the past year. As the price rises, many short-term traders, including retail investors (who hold 6% of the total supply), may look to capitalize on the gains and take profits.

This wave of profit-taking from short-term holders could pressure the price of OM in the short term, potentially leading to a pullback.

Outlook

While the future of Mantra looks promising with its recent partnership with Google Cloud and increasing adoption, the current market dynamics suggest that OM could face some volatility in the short term. Whale profit-taking and the behavior of short-term holders could trigger a selloff, especially as the price approaches its ATH.

Nevertheless, if Mantra can maintain its momentum and attract sustained interest from long-term investors, it could continue to perform well in the broader cryptocurrency market. Investors will need to keep an eye on whale movements and on-chain indicators to assess the likelihood of a correction or continuation of the bullish trend.