VELVET, an altcoin, has surged 119% over the past week following a breakout from a prolonged consolidation range three days ago. The token cleared the $1 resistance level, converting it into support, and peaked at $1.12 before a sharp pullback. Trading volume skyrocketed 392% to $71 million, while derivatives volume surged 390% to $432 million. Open Interest jumped 69% to a monthly high of $63 million, indicating significant speculative capital entering new positions. Perpetuals data shows buyers outpacing sellers, with the Long/Short Ratio above 1 on Binance. However, Spot Netflow spiked to a monthly high of $725,000 on August 14th, signaling profit-taking among holders. The RSI has entered overbought territory at 80, suggesting strong buyer presence but potential vulnerability to a pullback.
VELVET continued its remarkable price rally after breaking out of a prolonged consolidation range three days ago. The altcoin has maintained a stronger upward trajectory since then, clearing the $1 resistance level and flipping it into support.
VELVET jumped 54% to a six-week high of $1.12 before dropping sharply. At press time, it traded around $1.07, up 16% daily and 119% weekly. The altcoin’s trading volume climbed 392% to $71 million, indicating strong market activity.
As VELVET gained upside strength, speculators deployed more capital to chase the rally. According to data, derivatives volume surged 390% to $432 million, while Open Interest jumped 69% to $63 million.
With this increase, Open Interest reached a monthly high, indicating more capital entered new positions. Buyers outpaced sellers across the perpetuals market, with Perps Buy Volume climbing to 19.25 million against Perps Sell Volume of 18.53 million.
The daily Perps Delta rose to 0.72 million, signaling aggressive buying among derivatives traders. VELVET’s Long/Short Ratio climbed above 1, with Binance Top Traders primarily driving this increase at a ratio of 1.3.
Unsurprisingly, VELVET’s rally encouraged holders who had been underwater to cash out. On August 14th, Spot Netflow reached a monthly high of $725,000, later dropping to $38,000 at press time.
Positive Spot Netflow indicated that more VELVET entered exchanges than left them. Historically, higher Spot selling pressure has weakened market momentum and triggered pullbacks.
For now, VELVET is experiencing strong upward momentum driven by speculative demand. The altcoin’s Relative Strength Index climbed to 80, entering the overbought zone.
This reading reflected a strong buyer presence, with sustained demand at similar levels potentially supporting further gains. If demand holds, VELVET could defend $1 and target $1.60, where its previous trend collapsed. However, speculative demand rarely sustains an uptrend alone, and fading demand combined with Spot selling could push VELVET below $1.
