LAB rebounded from a low near $5.68 earlier in July and reached a high of $18.32. After reaching this level, the altcoin was rejected and entered a sharp decline.
The altcoin then recorded three consecutive lower daily closes and briefly fell below $1.
At press time, LAB was trading around $1.17 after gaining around 25% over the past day. The market capitalization also jumped about 25% to nearly $366 million.
However, the recovery came with an important caveat.
Trading volume fell more than 40% despite the price rise, indicating that buying activity weakened even as LAB recovered. This divergence suggests that the rebound may not have been driven by broad market demand.
Why has LAB rebounded?
AMBCrypto attributed the rebound to a deflationary decision by the LAB team rather than stronger organic demand.
The team burned 10 million LAB, worth approximately $11.3 million, as the token remained under heavy selling pressure. The reduction in circulating supply appeared to ease immediate selling pressure and helped LAB recover above $1.
Historically, token burns have often supported short-term price recovery. LAB seemed to follow the same pattern.
Can token burns offset upcoming unlocks?
However, the general supply situation remained less encouraging.
Blockchain investigator ZachXBT previously claimed that insiders control around 95% of the altcoin supply, giving a small group significant influence over the market.
ZachXBT also alleged that the borrower address linked to the LAB contract was used for token buybacks, suggesting that the team managed token buybacks, burns, and sales.
However, larger increases in supply could soon offset the recent burn.
According to Tokenomist, 14.8 million LAB, worth approximately $15.4 million, from the airdrop allocation will soon be released.
Investor allocations will free up an additional 31.5 million LAB, valued at approximately $33 million.
In total, 46.3 million LAB could enter circulation within a few days, potentially diluting the impact of the recent burn.
What’s next for the altcoin?
Despite the rebound, the general trend remained bearish.
The MACD remained deep in negative territory at -2.2, showing that sellers continued to dominate the momentum.
If buying interest falters after the token burn, LAB could fall back below $1. Conversely, sustained demand would be needed to absorb upcoming token releases and keep the recovery intact.
Final summary
- Burning tokens took the pressure off. Future unlocks could restore it just as quickly.
- LAB recovered above $1, but dilution risks remained hard to ignore.
