Token Price Halved in Two Days: On-Chain Data Reveals Massive Sell-Off

Cryptocurrency LAB witnessed a dramatic collapse over the past two days, with its price plunging 54% from around $1.2 to $0.55. According to a new investigation by on-chain sleuth ZachXBT, this steep decline was triggered by a coordinated, large-scale selling campaign traceable on the blockchain.

Affiliated Entity Executes Precise Dump, Straining Market Liquidity

ZachXBT's tracking data shows that starting July 10, a specific entity began funneling large quantities of LAB tokens into the decentralized exchange Aster and selling them continuously on the market. Within 48 hours, the entity dumped 18.4 million LAB tokens, worth approximately $18.3 million at the time. This concentrated and sustained selling pressure rapidly exhausted buy-side liquidity, leading to a free fall in price.

Tracing the Token Origin and Transfer Path

This sell-off was not an isolated incident. Historical on-chain records reveal a clear funding link between the selling entity and the LAB project team.

Initial Funding Source

In April of this year, the entity received over 196 million LAB tokens directly from the LAB team. These tokens were subsequently dispersed to deposit addresses on multiple centralized exchanges.

Complex Asset Movement

In May, the entity then withdrew roughly 100 million LAB tokens to 10 different external addresses. ZachXBT's analysis notes that market data at the time did not indicate any independent buyer accumulating a position of that magnitude, suggesting these addresses were likely still controlled by the same entity. These tokens remained dormant after the transfer until they were activated and sent to exchanges for sale beginning July 10.

Currently, the entity's addresses still hold approximately 81.5 million LAB tokens, posing a potential future risk of further selling.

Long-Standing Controversies and Market Concerns

The token distribution and market conduct of the LAB project have long been questioned by community observers. ZachXBT published a detailed report in May alleging several issues with the team.

  • Opaque Token Distribution: The team was accused of conducting unclear token distribution through private lending and over-the-counter (OTC) deals.
  • Unilateral Rule Changes: The project unilaterally altered token vesting rules without sufficient communication.
  • Highly Concentrated Supply: The team and its affiliates were suspected of controlling over 95% of the total token supply.
  • Abnormal Market Making: On-chain data showed trading patterns that could potentially manipulate prices.

Team Response and Exchange Accountability

Following the recent crash, the LAB team attributed the price movement to the actions of a "large market participant," without mentioning the activity of its associated addresses. In his report, ZachXBT further criticized several major centralized exchanges for failing to take effective action against apparent market manipulation, which indirectly contributed to losses for ordinary traders.

This incident underscores the risks inherent in projects with low transparency and highly concentrated token supply. When a vast majority of tokens are held by a small group of affiliated parties, the healthy mechanics of a fair market can easily be disrupted.