The chances of Lab [LAB] recovering are fading by the day. In the past 24 hours, LAB crashed by more than 13% at press time, extending its previous day’s downtrend.
This drop was driven by high selling activity, with daily volume spiking by 335% to around $50 million. The volume-to-market cap ratio was at 81%, reinforcing extreme trading activity, massive liquidity, and heightened speculative interest.
What was driving this high-selling activity?
LAB faces rejection at a KEY resistance level
The selling pressure was first induced by a technical price rejection. Since mid-July, LAB has been bouncing between $0.1264 and $0.1726. However, the breakdown occurred at the mid-level of the sideways range at $0.15.
At the time of writing, its Open Interest (OI) was rising as the price fell, indicating traders were short selling the asset. The OI stood at more than $124 million.
Moreover, the Cumulative Volume Delta (CVD) reinforced the high selling activity. The CVD showed 2.61 million LAB tokens had been distributed as the altcoin tested the $0.1270 support level.
If bulls return as they have done in previous sessions, LAB might see a relief rally from this support to at least the midpoint of the range. Otherwise, bears would continue dominating, as even on-chain data reinforced this massive selling pressure.
KuCoin sells LAB tokens as protocol revenue collapses
For instance, exchanges, particularly KuCoin, were selling LAB from their hot wallets. Thousands of LAB tokens moved from KuCoin to Bitget and Gate, hinting at selling. This exchange distribution fueled the high selling volume.
Notably, supply distribution was settling. Top holdings were held in LAB’s Gnosis Safe Proxy wallets, token vesting, Gate’s cold wallet, and Binance’s proxy wallet. The supply was slowly being redistributed.
Additionally, the protocol had lost most of its revenue, reinforcing the decline in the price action. That is, daily revenue collapsed from a high of $191K seen last September to around $6.20K.
Lastly, long liquidations have spiked, with $513K wiped out against $44K in short orders.
On the contrary, the Long/Short ratio stood at 3.50 on Binance and 10 on OKX, signaling that bulls were buying the dip. Top traders on Binance joined in, with the ratio climbing to 3.72, a sign of potential recovery.Â
Final Summary
- LAB crashed by more than 13% in the past 24 hours as the altcoin saw rejection at the $0.15 level.
- KuCoin selling, revenue collapsing, and long liquidations spiking amplify the losses in the LAB token.
