Velvet (VELVET) has been one of the biggest losers in the market over the past day, falling nearly 18% for the entire session as sellers take control.
Despite the recent pullback, Velvet has been one of the market’s top gainers over the past few months.
In the last 90 days alone, the token has outperformed every stock in the top 100 by market capitalization, posting a 571% gain that eclipsed the top performer, Listen (BEAT)which was up 530% over the same period.
Leveraged capital is emerging from Velvet’s Futures market
The biggest concern weighing on Velvet is the capital outflows that are spreading throughout its market. The regular Futures market for the indicator shows heavier outflows than inflows, a sign that money is leaving rather than coming in.
A decline in the stock market usually indicates that investors are pulling their money out, a move that reflects bearish sentiment. About $24 million has come out of the regular market in the past two weeks, pointing to the participants in the exit.
Rising prices usually bring confidence and new investment in the market, however Velvet has seen the opposite, with profit taking and high-profile media monitoring the movement and confirming existing sentiments.
Spot market traders have failed to keep up with the trend, buying less Picture of VELVET in the same window. This chart shows a Spot netflow of approximately $847,000.
Buying scale points doesn’t start a rally on its own, leaving the possibility that the price is going to go up higher to the rear.
Why Velvet’s decline is not in control
On the surface, Velvet’s slide and decline in capital in its regular market appears to be bearish dominance, however the underlying data tells a more nuanced story.
Chart data shows that despite capital outflows rising over the past two weeks, traders in the regular stock market of Velvet clung to optimism.
Funding Rate data, which reveals which part of the market is in control based on who is paying the money, shows that the long term has been in control.
Despite the $2.17 million in funds released in the last 24 hours, the Fund’s Support Rate reached 0.0044%, meaning that the all-time market cap of $27.87 million is still in long positions.
One side, long or short, usually dominates when strong sentiment causes the price to rise sharply in a short period of time.
In this case, the theory that Velvet’s decline seems to be a combination of investment management from traders who have made huge profits.
This it hangs on one support group
Chart analysis puts Velvet one significant level away from resuming or extending its slide.
This reading goes from a price trade to a rising support line that has supported several times, at least three times so far.
A break from this level would cause Velvet to fall back to $0.45, where the most important area is and could act as a catalyst.
If the upward support holds in place, Velvet’s recovery may already be underway. The support section remains an important part of the chart to spot further moves.
Brief Summary
- Velvet fell about 18% in one day, but remained one of the best performers in the market over the past three months, gaining 571% in 90 days and beating every other 100-point mark.
- $24 million left the regular market in 2 weeks, but still managed to improve.
