Today is the 301st day since I started posting dynamically, and I haven't missed a single day. Each post is not done half-heartedly, but is prepared with care. [微笑] If you think I am a serious person, you can follow me, and I hope the content every day can help you. The world is big, and I am small, so please follow me to avoid difficulty in finding. [微笑][微笑]

Cryptocurrency OM Explosion: Market Catastrophe Under Algorithm Out of Control and Large Holder Sell-off

On April 14, the cryptocurrency market was thrown into turmoil due to the flash crash of OM. The price of OM plummeted in a short period, triggering a chain reaction: the liquidation amount in the past hour reached as high as 28.61 million USD, with over 98% of the liquidations being long positions. Behind this storm, there were both the exacerbating effects of market maker algorithm errors and the hidden operations of large holders selling off in advance, ultimately leading to significant losses for investors. The catalyst for this incident stemmed from the violent fluctuations in the price of OM. An unidentified market maker mistakenly triggered an algorithmic strategy after the flash crash of OM, misjudging changes in market structure, which resulted in an abnormal 20% increase in the Bitcoin market capitalization index perpetual contract on Zhao's platform. Although OM only accounted for 1% of the index's weight, its flash crash still triggered a chain reaction in algorithmic trading, reflecting the high fragility of the cryptocurrency market.

Large holders selling off: The secret "smart money" harvesting began as early as February 2025, with multiple on-chain addresses showing signs of selling. For example, a wallet holding coins for over a year sold 8.71 million OM in one go on February 15, realizing a profit of 61.23 million USD; another address completed liquidation by hoarding 11.5 million OM, achieving a profit of over 77 million USD. The early exit of this "smart money" not only intensified the market liquidity crisis but also undermined retail investors' confidence, laying the groundwork for the subsequent collapse.

The explosion of OM was not without warning. In early 2025, its popularity surged, and some exchanges launched OM perpetual contracts, offering 20x leverage trading activities, attracting a large influx of speculative funds. However, high leverage combined with market frenzy amplified the risks. When prices fell, long position holders were the first to be impacted, ultimately leading to a tragic scenario of "longs killing longs."

The OM incident once again exposed the structural risks of the cryptocurrency market:
1. Automated trading strategies may go out of control in extreme market conditions, and risk control mechanisms need to be strengthened;
2. Institutions and large holders leverage their information advantage to exit early, leaving small investors as the "bag holders";
3. High returns come with high risks; blindly chasing after rising prices can lead to total loss.

The cryptocurrency market has never strayed far from the "law of the jungle". The explosion of OM has sounded the alarm for investors - in the pursuit of opportunities, only by rationally assessing risks and being vigilant against market manipulation can one avoid becoming a victim of the next storm.