LAB plunged over 60% in a week, crashing to an intraday low of $7.50 on July 3 after breaking below the $12 support region and triggering a wave of panic selling. According to crypto.news data, the sell-off erased billions in market value as investors rushed to exit amid growing uncertainty surrounding the project's tokenomics and insider ownership. The token had previously traded near $20 on June 27, representing a dramatic decline from its recent highs. Despite the sharp correction, trading activity accelerated as daily volume climbed significantly, showing that market participation increased during the decline as leveraged positions unwound rapidly.
The biggest catalyst for LAB's collapse appears to be mounting concerns over the token's distribution and ownership structure. 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 highlighted LAB's reported institutional backers including Animoca Brands, OKX, Lemniscap, GSR, Amber Group, Mirana Ventures, Gate, and KuCoin, though Zetoshi's suggestions represent personal opinion rather than verified fact.
LAB approached the $7.50-$7.65 support after breaking below the $12 region and triggering a rapid unwinding of leveraged long positions. According to crypto.news analysis, momentum indicators reflected the sharp deterioration in sentiment as 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 support area. The MACD remained bearish as the MACD line stayed below the signal line, while the histogram continued expanding deeper into negative territory, confirming that downside pressure had strengthened throughout the latest decline. A decisive loss of $7.50-$7.65 would expose the next major support near $4.00, where buyers previously emerged, representing a crucial test for the token's near-term direction.
Derivatives positioning continued to reflect bearish conviction as leverage rapidly exited during the decline. Open Interest (OI) dropped roughly 23% to $130.39 million, signaling that traders were closing positions instead of adding fresh bullish bets, while funding rates turned negative across perpetual futures markets, indicating that bearish traders had taken control and that demand for short exposure outweighed buying interest. The contraction in open interest and negative funding rates showed that long positions absorbed most of the selling pressure as the market reacted to deteriorating sentiment and automated liquidations triggered by the breakdown below major support levels.
LAB remains under considerable pressure after losing more than 60% in a week while technical indicators and derivatives positioning continue to favor sellers. The token's structural concerns coincided with a difficult backdrop for digital assets as investors reduced exposure to riskier cryptocurrencies during late June and early July. For now, traders will likely watch whether LAB can stabilize above the $7.50-$7.65 support zone, with a sustained recovery potentially depending not only on improving crypto market sentiment but also on greater transparency from the project regarding token ownership, vesting schedules, and future token unlocks. The absence of rising OI alongside heavy volume shows that new buyers have not stepped in aggressively, with capital exiting leveraged positions while participants reduced exposure amid growing uncertainty surrounding LAB's near-term outlook.
