The most dangerous—and most tempting—profits in the market often come after a cliff-like collapse.
Take a look at these extreme data for
$LAB : over the past month, the price was sliced from around $19 down to $1.21 at ankle-level, and it’s down as much as 95% from its ATH. But after a run of continuous sell-offs, it violently rebounded 41% within 24 hours, sustaining a market cap of
#119 with a massive $170 million in trading volume.
This chart is very typical. The avalanches on July 8 and 9 came with nearly $300 million in huge volume, suggesting that the panic selling has completed a thorough capitulation. As a token already listed on Binance Perpetuals, the current surge of
$LAB looks more like a liquidity premium created by the convergence of short-covering and bloodthirsty funds bottom-fishing. In the short term, sentiment has been crushed—so the rebound is naturally sharp.
But don’t rush to call a reversal. In a one-way downtrend where a single month has seen an 85% drop, trying to grab the rebound is like fishing for extra heat in a fire. The trapped-long supply overhead is unimaginably deep. If this wave of massive volume can’t allow the price to stabilize effectively and absorb sell pressure, it will most likely be a textbook “dead cat bounce.” If follow-up trading volume shrinks, the liquidity from chasing highs can easily become fuel for a second leg down.
Experienced traders do look for alpha when the streets are full of blood, but the prerequisite is discipline. So what do you think about
$LAB ’s bottom forming with rising volume right now—short-term bull-trap, or just a true washout?