LAB recorded one of its sharpest daily declines after excessive leverage unwound and tokenomics concerns weighed heavily on sentiment. At the time of writing, the token traded at $9.00, down 34% over the past 24 hours, while its market capitalization declined to $3.88 billion.
Despite the sell-off, trading activity accelerated as daily volume climbed 121% to approximately $58.71 million, showing that market participation increased during the decline. Reports highlighting upcoming token unlocks and concerns over concentrated token ownership added further pressure, prompting participants to reassess LAB’s valuation.
As a result, leveraged positions closed rapidly, while heightened uncertainty encouraged additional selling across both spot and derivatives markets.
Leverage rapidly disappeared from LAB’s market
During the decline, derivatives activity reflected a broad reduction in speculative exposure rather than fresh risk-taking.
At press time, Open Interest (OI) fell 23.01% to $130.39 million, indicating that traders closed positions instead of adding new leverage during the decline. The contraction suggests that long positions absorbed most of the selling pressure as the market reacted to deteriorating sentiment.
Trading volume remained elevated despite the decline in OI, reinforcing the view that position unwinding dominated market activity. However, the absence of rising OI alongside heavy volume showed that new buyers had not stepped in aggressively.
Instead, capital exited leveraged positions while participants reduced exposure amid growing uncertainty surrounding LAB’s near-term outlook.
Can LAB defend its final support zone?
LAB approached the $7.65 support after a sharp rejection from the $20 resistance area, leaving sellers firmly in control of the broader trend.
Price closed near $9.04, placing the token only a short distance above this key demand level. At the time of writing, the MACD remained bearish as the MACD line stayed below the signal line.
The histogram continued expanding deeper into negative territory, confirming that downside pressure had strengthened throughout the latest decline. A decisive loss of $7.65 would expose the next major support near $4.00, where buyers previously emerged.
However, if buyers defend the current zone successfully, LAB could attempt a relief rebound toward $7.65 before challenging higher resistance levels, although confirmation would still require improving technical strength.
Why are short sellers still in control?
Funding data continued supporting the bearish derivatives outlook as the OI-Weighted Funding Rate remained below zero throughout the recent decline. The latest reading stood at approximately -0.1768%, showing that short sellers continued paying to maintain their positions.
Persistent negative funding reflected sustained bearish conviction despite the sharp correction. Unlike temporary funding dips, this trend extended across several sessions and aligned with the decline in OI, reinforcing the broader risk-off environment.
Although funding had not reached the extreme levels seen earlier in June, it still indicated that bearish positioning dominated the derivatives market. Until funding recovers toward positive territory, sellers would likely retain the upper hand.
If buyers defend the $7.65 support, the token could stabilize and attempt a recovery.
However, a confirmed breakdown below that level would likely shift attention toward the $4.00 support as bearish pressure remained dominant.
Final Summary
- LAB trading volume surged while leverage rapidly exited, highlighting aggressive risk reduction across derivatives.
- Bearish funding and weakening technical structure kept sellers firmly in control near critical support.
