Velvet Plummets 37% as Short Traders Take Control

Velvet [VELVET], one of the market's leading recent gainers, plummeted sharply as leveraged capital exited. The token declined by as much as 37% during the day while bearish pressure intensified.

The sell-off resembled DeXe's [DEXE] 87% crash after both tokens previously led the market's gainers.

Despite its decline, Velvet retained a 367% gain over the past 90 days.

A CoinGlass analysis revealed that whale activity increased sharply during Velvet's latest decline. The Whale vs Retail Delta climbed to 0.098, one of its highest readings this year. However, the positive reading confirmed elevated whale participation rather than proving that whales caused the sell-off.

Leveraged outflows reached $516 million across 15 days, while Netflow stood at approximately $16.1 million. This decline in leveraged capital weakened VELVET's derivatives market and left price support increasingly dependent on spot demand.

The Funding Rate fell to -0.0314%, indicating that short traders paid long traders to maintain their positions. This negative reading reflected stronger bearish positioning across Velvet's perpetual market.