Recap: Momentum $MMT Suddenly Attacks Air Force in the Middle of the Night, Then Sharp Drop! The Details of Retail Investors Liquidating $109 Million

On the day of Momentum (MMT)'s TGE within the Sui ecosystem, the price surged from $0.34 to $4.40 before crashing sharply, accompanied by a liquidation waterfall of approximately $109 million and high-leverage short squeezes. Both derivative short sellers and retail traders chasing the peak suffered significant losses. (Background: Retail investors poured $1.4 billion into “shanzhai coins,” with MegaETH, zkPass, and Momentum ICOs exceeding expectations.) (Additional context: x402 went viral — tutorials on new coin minting, ecosystem browsers, real-time trading tracking, and a comprehensive toolkit compilation.)

On November 4, Momentum (MMT) was simultaneously listed on multiple exchanges, triggering rapid interactions between futures and spot markets. The price climbed from a low of $0.34 to a peak of over $4.40, then quickly retraced by 92%. During this process, a liquidation waterfall of about $109 million occurred, with roughly $102 million from short liquidations.

This analysis reconstructs the price trajectory from a forensic perspective, dissects leverage and token supply mechanisms, and outlines the risk patterns faced by retail investors at the peak.

Momentum (MMT) Overview:
Built within the Sui ecosystem, Momentum is positioned as a flagship DeFi project, combining centralized liquidity market-making (CLMM) with surrounding applications. Early market expectations were high for its deployment and expansion. Indicators before TGE showed strong institutional support and community engagement, with widespread anticipation of significant liquidity and trading activity on launch day.

Tokenomics features a supply structure with a “locked main supply” and “unlocked community tokens,” creating a limited circulating supply that, if demand concentrates, can accelerate prices.

November 4 TGE Two-Stage Bloodletting:
The Momentum TGE was not merely a market dump or pump-and-dump scheme. Instead, it was a two-phase event driven by multiple factors, resulting in a double-sided massacre that caused substantial losses for two distinct investor groups:

1. Phase One: Derivative Short Squeeze
   In the initial hours after launch, aggressive exchange listing strategies, carefully designed tokenomics (including anti-sell mechanisms), and severely underestimated market demand led to a perfect storm for short traders. Data confirmed a $102 million short liquidation waterfall, which propelled the price from about $0.34 to over $4.40—a gain of over 1,180%.

2. Phase Two: Retail Bull Trap
   The massive price surge (displayed as “+2000%” on dashboards) misled retail investors into believing there was strong market demand and solid fundamentals. Many retail traders, driven by FOMO, chased the peak at around $4.40. As the short squeeze momentum waned, the price lost its upward drive and, under early community profit-taking pressure, plummeted over 92% within 24 hours, stabilizing around $1.30.

Token Economics Analysis: Locked Supply and Community Unlocks (Trap Mechanism):
The core of the subsequent short squeeze lies in Momentum’s tokenomics. The total supply is 1 billion tokens.

• Initial Circulating Supply at TGE: Approximately 175 million to 204 million tokens (17.5%–20.4%).
• Key Mechanisms:
  • 0% unlock for the team and early investors (VCs): These tokens are fully locked for 12 months (cliff) and then linearly released.
  • Only public sale and airdrops are fully unlocked at TGE: These constitute the only circulating supply at launch.

This design intentionally creates an “anti-dump” mechanism at TGE, meaning there is no significant sell pressure from VCs or insiders. The only sellers are community members who participated in public sales and airdrops, holding tokens that are fully unlocked and low-cost.

Critical Mistake for Short Sellers:
Traders attempting to short MMT faced a fatal flaw: they were shorting against a market with no “smart money” VC or team selling. Their only counterpart was a highly enthusiastic community that had oversubscribed MMT by 1,739%. The market structure at TGE was characterized by extremely high buy demand (backed by VCs, on-chain indicators, and oversubscription) and very limited sell-side supply (mainly community holders), creating the perfect environment for a short squeeze.

Losses Breakdown:

• First Wave: Derivative Short Sellers
  Experienced or reckless derivative traders suffered the earliest losses. The $102 million short positions were forcibly liquidated within four hours. Their losses stemmed from high leverage and incorrect expectations—believing TGE would lead to a dump, but instead, the tokenomics and listing strategies were designed to punish such behavior. Their forced liquidations fueled the price spike, turning their losses into market-driven buying pressure.

• Second Wave: Retail Investors in the Bull Trap
  Retail traders, misreading the signals, suffered losses during the peak. The massive $102 million short squeeze appeared as a +2000% rally, which many interpreted as strong demand and fundamental strength. FOMO drove retail investors to buy near the top, expecting continued upward momentum. When the demand exhausted, and the short squeeze unwound, the price collapsed over 92%, leaving latecomers with significant losses.

Summary:
The TGE event for Momentum (MMT) was a complex interplay of tokenomics, strategic listing, and market psychology, leading to a dramatic short squeeze and subsequent retail trap. The design intentionally minimized early sell pressure, but the combination of high demand and limited supply created a perfect storm for a rapid price surge followed by a sharp correction, causing substantial losses across different investor groups.