VELVET's 54% surge has split the market: leveraged traders are chasing $1.60 while spot holders cash out near $1.
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VELVET rises 54% to $1.12 as leveraged longs target $1.60
VELVET rose 54% to $1.12, a six-week high, before settling at $1.07 — up 16% daily and 119% weekly — as leveraged traders drove the rally.
Derivatives data from CoinGlass shows Open Interest jumped 69% to $63 million, a monthly high, while Derivatives Volume surged 390% to $432 million as of Aug. 15.
Perpetuals buy volume reached 19.25 million against 18.53 million in sells over the past day, pushing the daily Perps Delta to 0.72 million. The Long/Short Ratio climbed above 1, with Binance Top Traders at 1.3 — a reading that shows most derivatives traders expect the rally to continue.
The tension is visible on the spot side. Spot Netflow hit a monthly high of $725,000 on Aug. 14 before dropping to $38,000, indicating holders who were previously underwater are now selling into strength. If demand holds, VELVET could defend $1 and target $1.60, where its prior trend collapsed. Fading demand and continued spot selling could push the token below $1.
Derivatives volume runs six times spot
The rally has been driven almost entirely by derivatives activity. Trading volume climbed 392% to $71 million, while derivatives volume reached $432 million — roughly six times the spot figure. This gap suggests the move is leveraged rather than organic.
VELVET's Relative Strength Index climbed to 80, entering overbought territory. Historically, sustained readings above 80 have preceded pullbacks in altcoins, though strong buyer presence can keep momentum alive for extended periods. Bitcoin's dominance has remained steady through the week, but VELVET's 119% weekly gain far outpaces the broader crypto market's single-digit moves.
$1 support is the line in the sand
The key level to watch is $1. If VELVET holds this support, the path to $1.60 remains open. A break below $1 could trigger liquidation cascades across leveraged positions, given the elevated Open Interest.
Spot selling pressure is the primary risk. Positive Spot Netflow — more tokens entering exchanges than leaving — has historically weakened market momentum. The monthly high of $725,000 on Aug. 14 suggests a meaningful portion of holders are taking profits.
The divergence between derivatives enthusiasm and spot distribution is a warning sign. Speculative demand rarely sustains an uptrend alone, and if spot holders continue to sell into strength, VELVET's defense of $1 could fail, potentially triggering a sharp unwind of the $63 million in open positions.
This article is for informational purposes only and does not constitute investment advice.
