LAB price has suffered one of the steepest collapses in the crypto market this week, losing more than 60% of its value as concerns over insider holdings, token transparency, and heavy derivatives liquidations sparked a wave of panic selling.
Summary
- LAB price crashed more than 60% in a week as insider ownership concerns triggered panic selling.
- Heavy derivatives liquidations and a 23% drop in open interest accelerated the token’s decline.
- Weak crypto market sentiment and uncertainty over token unlocks added to the selling pressure.
According to crypto.news data, LAB (LAB) plunged to an intraday low of $7.50 on July 3, down more than 60% from its recent high near $20 on June 27. The sell-off erased billions in market value in less than a week as investors rushed to exit amid growing uncertainty surrounding the project’s tokenomics and insider ownership.
The biggest catalyst appears to be mounting concerns over LAB’s token distribution. Community discussions intensified after on-chain investigator ZachXBT previously alleged that insiders controlled more than 95% of the token supply, while also raising concerns over token allocation transparency, private OTC agreements, changing vesting schedules, and large insider wallet movements before major price swings.
These remain public allegations that have not been established in court, and the LAB team has disputed or not publicly accepted many of the claims.
Additional attention came from crypto community member Zetoshi, who summarized the controversy and highlighted LAB’s reported institutional backers, including Animoca Brands, OKX, Lemniscap, GSR, Amber Group, Mirana Ventures, Gate, and KuCoin, although Zetoshi’s suggestion that these relationships explain the lack of public action against the project represents personal opinion rather than verified fact.
Why did the LAB sell-off accelerate so quickly?
Once confidence weakened, technical factors amplified the decline. As LAB broke below major support around the $12 region, leveraged long positions began unwinding rapidly, triggering a liquidation cascade across derivatives markets.
Open interest dropped roughly 23% to $130.39 million, signaling that traders were closing positions instead of adding fresh bullish bets. At the same time, funding rates turned negative across perpetual futures markets, indicating that bearish traders had taken control and that demand for short exposure outweighed buying interest.
Momentum indicators also reflected the sharp deterioration in sentiment. The MACD histogram expanded further into negative territory, reinforcing the growing downside momentum as automated liquidations and stop-loss orders accelerated the move toward the $7.50 support area.
Could broader market conditions have made the decline worse?
The LAB-specific concerns also coincided with a difficult backdrop for digital assets. During late June and early July, investors broadly reduced exposure to riskier cryptocurrencies as global central banks maintained restrictive monetary policies and capital rotated away from speculative altcoins.
The broader market weakness became an additional headwind as corrections in Bitcoin and Ethereum reduced overall risk appetite. With liquidity already thinning across the altcoin market, LAB’s structural concerns left few buyers willing to absorb heavy selling pressure from early investors and whales taking profits after the token’s remarkable rally from roughly $0.10 to nearly $27 earlier this year.
For now, traders will likely watch whether LAB can stabilize above the $7.50-$7.65 support zone. A sustained recovery may depend not only on improving crypto market sentiment but also on greater transparency from the project regarding token ownership, vesting schedules, and future token unlocks.
