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Recently, the Lab [$LAB] token experienced an explosive rally, surging 915% from $0.65 to an all-time high of $6.60. However, this market pump has come under increased scrutiny from market participants due to concerns about market manipulation.
$LAB team faces market manipulation accusations
ZachXBT accused the team of market manipulation. The on-chain investigator alleged that insiders orchestrated the recent rally through opaque private loans.
The team used discounted OTC deals and market-maker coordination, with no clear details on token distribution available.
ZachXBT added that multiple OTC and loan deals have been deployed MTD. For instance, individuals received a menu via WhatsApp with loans at 5%/m and OTC at a 60% discount with a 5-month cliff.
Under these terms, individuals received a guaranteed 25% OTC discount, recalculated monthly, and a guaranteed 20% discount tranche.
Additionally, insiders deposited 226 million $LAB to Bitget deposit addresses between March and April 2026. These tokens remained dormant until 100 million $LAB was withdrawn days ago, which brought about public attention.
ZachXBT claimed that an unknown MM operating via Chinese exchanges likely received supply. Since the token’s TGE, there have been only $150k in non-insider transfers, suggesting that insiders control 95% of the supply.
Large market entities continue to cash out
With the $LAB token under extreme pressure across the market, large entities have continued to close their positions.
OxNox reported that 9 million $LAB, worth $54 million, were transferred to Gateio from multiple sources, including a Wintermute wallet.
After receiving these tokens, smaller transfers started moving into two different wallets. These whales making such moves show a lack of confidence in the token’s prospects.
Coupled with that, exits across Futures and Spot markets have intensified. On the futures side, Open Interest dropped 10% to $615 million, while derivatives volume declined 29% to $1.6 billion.
A drop in these two indicated traders flipped bearish and aggressively closed positions to cut losses or realize gains.
On the spot side, Netflow flipped positive after holding negative for two consecutive days. At press time, netflow was $835k, a significant jump from -$2.3 million the previous day.
Historically, when large market players dump, especially during periods of weakness, the downside spiral tends to intensify.
What’s next for altcoin?
After the market feud on $LAB intensified, the altcoin dropped significantly, touching a low of $2.9 before rebounding. At press time, $LAB traded at $4.15, down 24% on the daily charts and 15% from its ATH recorded days ago.
With the price drop, the downside momentum strengthened significantly. The altcoin’s Stochastic Momentum Index (SMI) made a bearish crossover and fell to 26, indicating strong downside pressure.
SMI dropping to such levels signals the downside strength and the likelihood of the trend’s continuation. Thus, if the negative feud persists, the altcoin is likely to drop towards $3.
Final Summary
- On-chain investigator ZackXBT alleged that $LAB insiders orchestrated the recent rally through opaque private loans.
- $LAB insiders deposited 226 million $LAB into Bitget deposit addresses between March and April 2026, then withdrew 100 million $LAB, sparking investor concern.