After a sharp decline in mid-June, VELVET quickly recovered, with its price significantly rebounding from recent lows. Accompanying the spot market rally, open interest, trading volume, and liquidation sizes in the derivatives market also increased simultaneously, indicating a renewed concentration of short-term capital flowing into this token.
Dropped 83%, then quickly rebounded
After reaching a high of $1.85 on June 11, VELVET declined steadily, falling to a low of approximately $0.31, a peak-to-trough decline of about 83%. Since then, buying interest has begun to return, and by June 22, the price had recovered to around $0.52.
On June 23, the market briefly came under renewed pressure, with prices dipping to around $0.41. However, buying strength soon intensified, rapidly reversing the trend. From this low point, VELVET rose to approximately $1.45, achieving a cumulative rebound of over 250%.
Position and trading volume increase in tandem.
As prices rebounded, derivative trading activity rose significantly. Data shows that VELVET’s open interest increased by 243% to $170.74 million, indicating greater capital inflow into the derivatives market.
- Open interest rose to $170.74 million.
- Derivatives trading volume rose to $1.27 billion.
- Both figures have significantly increased compared to previous levels.
Derivatives trading volume also increased significantly, by 1090%. The simultaneous growth in open interest and trading volume typically indicates a rapid rise in short-term trading activity, making price fluctuations more likely to be amplified.
Short liquidation amplifies the upward momentum
Clearing data shows that $2.87 million in positions were liquidated during this market move, with approximately $2.51 million coming from short positions. The high proportion of shorts indicates significant short covering during the rally, further pushing prices higher.
The report mentioned that one of the triggers for this rebound may be Velvet’s integration with Aerodrome. This integration enhances pricing and reduces slippage for its non-custodial trading interface, improving the platform’s user experience and providing new momentum for the token’s price movement.