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Red Alert: 5 Critical Warnings to Prevent Your Crypto Investments from Sinking!
The nearly 90% collapse of the MANTRA (OM) token hit crypto investors like a slap in the face. After millions of dollars in losses, investors began to question what went wrong to avoid making the same mistake again. Experts explained the dangerous signs behind this dramatic drop and how to steer clear of similar crypto projects. Here are 5 critical strategies you need to know to avoid putting the "next OM" in your wallet...
1. The Inflated and Uncontrolled Tokenomic Structures of Cryptocurrencies
The OM token increased its supply after a community vote and transitioned to an unlimited, inflationary model. This situation diluted the assets of token holders and made the price susceptible to manipulation. Moreover, 90% of the tokens were held by the project team.
To detect such situations early, it is necessary to check the supply limit of the token you have invested in, the amount in circulation, and whether large wallets are locked or not. Especially with tools like "bubble map", these analyses can become even easier.
2. Signs of Suspicious Price Movements and Manipulation of Cryptocurrencies
While the crypto market is on a decline, the price of OM has attracted attention with sudden jumps. The cycles of "pump-flat line-pump" showed deviations from natural market behavior. This raised suspicions of price manipulation.
Experts emphasize the need to raise alarms by observing such movements. Additionally, setting up stop-loss systems is critically important for automatically reducing risk. At the same time, diversifying the investment portfolio is one of the most effective ways to minimize losses.
3. Project Foundations and Transparency Issues
The OM project had a TVL of only 13 million dollars against an FDV of 9.5 billion dollars. Additionally, bots were rewarded in the airdrop, while real users were excluded. The team has also been associated with suspicious projects in the past.
Therefore, before investing, the team's background, the project's roadmap, community engagement, and regulatory compliance should be examined in detail. It is essential to distinguish between real growth and artificial inflation.
4. Don't Miss Whale Movements
Just before the collapse of OM, a wallet associated with the project transferred 3.9 million tokens to the exchange. A total of 227 million dollars worth of tokens were sent to exchanges. This was a precursor to the collapse.
Investors can receive early warning signals by monitoring such large transfers. Whale movements can be tracked using tools like Arkham, Nansen, and Etherscan. Additionally, such sales can have a much greater impact on the price of tokens with low liquidity.
5. The Role of Central Exchanges in Cryptocurrency and the Liquidity Trap
After the collapse of OM, the project's CEO blamed the CEXs, while Bnb and some analysts pointed out that the price drop was caused by the short positions opened by the investors themselves. The reality is that liquidations during times of low liquidity can drop the price very quickly.
Therefore, investors need to avoid high leverage, refrain from trading during risky hours, and monitor liquidity measurements, for example, 1% depth. Additionally, storing tokens in their own wallets can reduce the risks arising from centralized exchanges.