Here’s Why Velvet (VELVET) Price Exploded 240%

VELVET is up over 5% today, trading around $1.66. Over the last week, it’s climbed about 237%. For the month, it’s up 1,700%. That puts it as the second-biggest winner in crypto today,only behind Jito (JTO).

The rally has turned a little-known DeFi token into one of the week’s biggest success stories, with traders piling in as new products, deeper liquidity, and a wave of leveraged buying fuel one of the strongest breakouts of the month.

Why Is Velvet (VELVET) Price Rising?

The VELVET price has been supported by several fundamental developments over the past few months. One of the biggest came through its partnership with 1inch Network, giving traders access to better trade execution and lower slippage through aggregated liquidity. 

The protocol also uses a deflationary model where every transaction carries a 2% fee, split between permanent token burns and rewards distributed to holders, reducing circulating supply over time.

Momentum accelerated again after Velvet migrated liquidity to Aerodrome on Base, giving traders deeper liquidity pools and smoother execution. At almost the same time, the protocol rolled out synthetic leveraged markets for pre-IPO companies such as SpaceX and OpenAI through its Trade.xyz integration, opening exposure to assets that remain inaccessible on traditional exchanges.

Derivatives data added even more fuel. After dropping 83% from its June 11 peak, the VELVET price rebounded more than 250% in only a few days. The recovery forced roughly $2.51 million worth of short positions to close, creating additional buying pressure. Open interest also climbed 243% to $170.74 million, showing fresh capital entered the market alongside the rally.

Why Whale Positioning Could Decide VELVET Price Next Move

Fresh data from the derivatives market shows big players are still backing VELVET. Alastar pointed out that whales hold about $32 million in long positions with an average entry price near $1.00. 

That puts them at roughly $13 million in unrealized profit right now. The same data shows smart traders control $42.57 million in total positions, with long exposure beating shorts by nearly 4 to 1. Longs is at $34.04 million, shorts at just $8.53 million.

The bearish side is hurting. Whale shorts total only about $7 million, and over 60% of those are already losing money. Retail traders are still betting against it too, which could set up another short squeeze if buyers push VELVET through the next resistance level.

Even so, everyone’s watching what whales do next. Alastar said the real red flag would be large holders starting to sell off their long positions while open interest drops at the same time. That combination would mean fresh selling pressure is coming in. 

But until those whale longs start to unwind, the bigger bullish picture stays intact, even if the rally has cooled off near resistance.

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Velvet Chart Analysis

We had a look at the VELVET chart alongside Finora AI’s trade setup, and the technical picture shows the rally may be entering a cooling-off period. Price attempted to push above the $1.71531 resistance zone but failed to hold the breakout. 

That rejection came close to the upper resistance near $1.87681, exactly where Finora AI expects sellers to defend if buyers cannot regain control.

The chart also supports that view. After climbing from below $0.50 to almost $1.90 in only a few sessions, the VELVET price has started printing smaller candles near resistance. Fast rallies of this size often lead to profit-taking before the next directional move. The first support comes in around $1.58841, followed by a stronger demand zone near $1.42322 if selling pressure increases.

The bearish outlook would be invalidated if buyers reclaim $1.87681 with strong volume. If price closes above that level for real, the old high gets left behind. Then $2.03 could come into play. But until that happens, price is stuck between a hard ceiling up top and support just below. Everyone’s watching to see which one gives first.

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Where Will VELVET Price Go Next?

Likely Case

Most likely, VELVET settles into a range between $1.59 and $1.72 for a while. The price climbed more than 237% in one week and 1,700% over the last month. 

That kind of run usually needs time to digest, profit-takers step in, and the market catches its breath before making its next move. As long as it stays above $1.58841, the bigger uptrend stays alive.

Bullish Scenario

If buyers push the VELVET price above $1.87681 with convincing volume, momentum could carry the token toward $2.03, matching Finora AI’s upside target. Continued growth in derivatives activity, stronger liquidity on Aerodrome, and demand for Velvet’s synthetic pre-IPO markets would strengthen that case.

Bearish Scenario

If VELVET can’t hold $1.58841, the short-term picture turns darker. A drop below that level could push it down to $1.42, where buyers might try to step in and slow things down. After that huge monthly run, profit-taking could speed up,and if it does, we could see it fall even further before the next real move up.

Frequently Asked Questions

Is the VELVET price rally sustainable

That depends on whether buying volume remains strong and whether the project continues attracting users after its Aerodrome integration. Traders are also watching for any selling activity from team wallets.

Is Velvet a high-risk investment

Like many smaller-cap cryptocurrencies, Velvet can experience large price swings in both directions. Investors should consider the project’s fundamentals, token supply, market conditions, and their own risk tolerance before investing.