- LAB plunged nearly 90% in a week as heavy selling erased billions and shook investor confidence.
- Analysts linked LAB’s collapse to exchange-side selling as supply and liquidity concerns deepened.
- Traders are watching for a short squeeze if LAB rebounds and triggers major short liquidations.
LAB suffered another sharp selloff on July 9, extending a week of heavy losses that erased billions of dollars in market value and rattled the broader crypto market. The multi-chain trading terminal token fell to around $0.90, down about 60% over the past 24 hours and nearly 90% over the past week.
The latest decline comes after weeks of questions over LAB’s token supply, liquidity, and trading activity. Its market capitalization dropped to about $280 million, while daily trading volume climbed above $340 million as selling intensified.
Analysts Point to Exchange-Side Selling
Market commentator Ash Crypto pointed to the scale of the collapse, saying the token lost 92% of its value in just two days, wiping out about $4.51 billion in market capitalization. He added that traders with long positions also took a major hit, with roughly $14 million in liquidations.
Meanwhile, analyst Zetoshi said blockchain data alone does not fully explain the sharp decline. In his view, much of the selling likely took place within exchanges through automated trading systems rather than through transfers from large external wallets.
Zetoshi also noted that several major investors and exchanges, including OKX Ventures, have ties to the project, adding to questions about the trading activity behind the selloff.
Short Squeeze Potential Emerges
Despite the steep decline, some traders are now watching key price levels where short sellers could come under pressure. Zetoshi said a rebound to $2 could trigger more than $8 million in short liquidations as bearish traders are forced to close their positions.
He added that even larger clusters of short liquidations sit between $15 and $19. If LAB stages a strong recovery, those forced buybacks could add to the upward price move.
Fresh Selling Adds to Market Concerns
Analyst fabiano.sol also pointed to unusual exchange activity before the latest selloff, saying more than $1.6 million worth of LAB was deposited into KuCoin and MEXC shortly before the price dropped.
Meanwhile, CryptoTelugu compared the crash with some of the biggest collapses in the crypto market, noting that LAB’s fully diluted valuation had fallen from about $27 billion to roughly $880 million.
The LAB team blamed heavy selling by large market participants for the collapse. However, it did not identify the sellers or provide wallet-level evidence to support the claim. That has left traders with more questions than answers, adding to uncertainty around the token.
Related: Elon Musk Claims Grok 4.5 Is Closing In on Anthropic’s AI Performance
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
