VELVET is currently around 0.577u. A day ago it was at 1.03; the week’s high was 1.25—then it got halved within two days.
Let’s first make clear what happened. This round moved within a week from 0.42 to 1.25—about nearly three times. Then it started collapsing yesterday: in the last 24 hours it dropped more than 40%. It also saw six consecutive bearish candles over four hours, with not a single bullish one.
The biggest issue is on the derivatives/futures side. Open interest shrank by nearly 40% in one day. This means longs were liquidated and cleared out—not a normal pullback. The funding rate, which was close to 0.1%, was smashed back to nearly zero, and the basis is tightening as well. On the futures side, people chasing longs have basically disappeared.
Spot can’t absorb it either. In the order book’s 20 levels, buy orders are only about two-thirds of sell orders—buys are clearly thinner. There is also zero spot large-order inflow; in five sampling instances, there wasn’t even one large order. Active orders are also more sell-heavy than buy-heavy. With this kind of tape, it’s not that nobody is looking at the downside—it’s that nobody is taking it.
The only disagreement is among large accounts: positions are still net long. The number of big accounts has been up by about 20% over the past seven hours, suggesting some capital is trying to step in and catch at low levels. But since no big spot orders have come in, this long position can only be considered probing—it hasn’t been confirmed by the market yet.
My attitude in one sentence: don’t chase longs, and don’t rush to pick the bottom. Let the selling pressure fully release first. Whether the low can be held—and when spot bids come back—matters more than guessing a rebound. Taking a flying knife immediately after a collapse has a terrible cost-effectiveness.
#velvet $VELVET
Let’s first make clear what happened. This round moved within a week from 0.42 to 1.25—about nearly three times. Then it started collapsing yesterday: in the last 24 hours it dropped more than 40%. It also saw six consecutive bearish candles over four hours, with not a single bullish one.
The biggest issue is on the derivatives/futures side. Open interest shrank by nearly 40% in one day. This means longs were liquidated and cleared out—not a normal pullback. The funding rate, which was close to 0.1%, was smashed back to nearly zero, and the basis is tightening as well. On the futures side, people chasing longs have basically disappeared.
Spot can’t absorb it either. In the order book’s 20 levels, buy orders are only about two-thirds of sell orders—buys are clearly thinner. There is also zero spot large-order inflow; in five sampling instances, there wasn’t even one large order. Active orders are also more sell-heavy than buy-heavy. With this kind of tape, it’s not that nobody is looking at the downside—it’s that nobody is taking it.
The only disagreement is among large accounts: positions are still net long. The number of big accounts has been up by about 20% over the past seven hours, suggesting some capital is trying to step in and catch at low levels. But since no big spot orders have come in, this long position can only be considered probing—it hasn’t been confirmed by the market yet.
My attitude in one sentence: don’t chase longs, and don’t rush to pick the bottom. Let the selling pressure fully release first. Whether the low can be held—and when spot bids come back—matters more than guessing a rebound. Taking a flying knife immediately after a collapse has a terrible cost-effectiveness.
#velvet $VELVET