LAB hits record $20 as buyback program fuels 40% rally

LAB extended its rally by 40% in a day, with gains reaching 90% over two days as the price tagged record levels of $20. Fundamentals appear to be driving sentimental trading, despite existing flaws in the project's tokenomics. The recent buyback program launch seems to address token distribution concerns previously raised by ZachXBT. So the obvious question: does the fact that buybacks will address balanced tokenomics issues actually influence the rally?

Yesterday, LAB's official page on X (formerly Twitter) announced that a buyback program targeting three main issues went live. The data showed that protocol fees worth $3.401 million were used to repurchase a total of 22.644 million LAB tokens. The team framed the move as converting ecosystem revenue into market demand, which is a more honest description than most "ecosystem alignment" talk.

The program is expected to maintain steady buy pressure and, by extension, value growth. It is also anticipated to advance long-term resilience for ecosystem sustainability, as well as balanced tokenomics. The mechanism here is distributing LAB tokens through incentives to the community, ostensibly to enhance healthy token circulation. Whether "healthy" survives contact with the open market remains to be seen.

This buyback program has already influenced a hike in trading activity. Open positions have increased significantly across different exchanges, particularly among small investors. This was evident as Funding Rates on multiple exchanges turned green — a sign of buyer dominance. Most of the Open Interest (OI) climbed by double digits, which is rarely a boring signal.

On Binance, for instance, OI rose by 21.83% to $155 million. Short liquidations in the last 24 hours surpassed $17 million across all exchanges. The largest liquidations occurred on Bybit, Binance, and OKX respectively, in that order. Anyone on the wrong side of that trade had a very quiet afternoon.

On top of that, there seemed to be genuine token demand. This was evident with the Long/Short Ratio exceeding 1, except on KuCoin, which decided to be different. This activity took place against the backdrop of massive Futures market demand that sparked a 16% rally recently, giving the chart a tidy tailwind.

On the charts, LAB's price went ahead and hit a record high of $20 following today's rally. The altcoin has shown high volatility lately, as reflected by the Bollinger Bands (BB) expanding to maximum levels. However, the Chaikin Money Flow (CMF) appeared to be ranging between 0.22 and 0.23. This value hinted at positive capital inflows, though the impact was minimal since the indicator was not rising.

At the time of writing, the altcoin's rally was continuing to gain momentum with 12 straight green 4-hour candles. This momentum was supported by the price sitting far from the mid-level of the BB. It is worth noting the stall between $19 and $20 over the past three sessions. This may allude to a potential correction, one where LAB could return to around $16 or lower, which is the polite way of saying "the chart is taking a breather."

Simply put, the buyback program has so far elicited some confidence, since it is addressing one of the market's main concerns: balanced LAB tokenomics.