Velvet slides 75% in a week as longs hold despite 7x losses

Velvet fell 75% over the past week and another 16% in 24 hours, with long traders absorbing 7x more losses than short sellers.

"Traders are holding net-long positions even as selling pressure intensifies, which suggests conviction in a recovery," data from Coinglass shows, with the funding rate at 0.0050%.

Open interest dropped 28% to $21.07 million from $29.36 million as capital exited the perpetual market. The Taker Buy Sell Ratio slipped to 0.95, below the 1.0 threshold that signals seller dominance. Total liquidations reached $558,320 in the past 24 hours, with long liquidations accounting for $490,520 — roughly 88% of the total.

Spot buyers have added $1.58 million in net inflows this week, with $781,000 arriving in the past 48 hours, a bet the decline is a discount entry. Velvet has surged 59% over the past 30 days and 533% over the past quarter, giving bulls a longer-term case for a rebound.

The divergence between persistent long positioning and the 75% price decline creates a high-risk setup. If the price continues to fall, cascading long liquidations could accelerate the selloff. If bulls are proven correct, a sharp squeeze could follow as short sellers are forced to cover.

This article is for informational purposes only and does not constitute investment advice.