VELVET cryptocurrency surges amid massive trading volume and rising leverage

The cryptocurrency VELVET has experienced a significant price surge, with recent gains reported between 25% and 35%, extending its 90-day increase to approximately 548%. This rally has been characterized by explosive activity in both spot and derivatives markets. Spot volume rose by roughly 1,030.09%, while derivatives volume saw a massive increase of 5,311.17%, suggesting high levels of speculative interest and rapid position rotation.

Open interest rose by 65.81% to $39.07 million, increasing the asset's leveraged exposure and potential fragility. On Binance, top traders maintained a bullish bias, with long positions accounting for 60.76% of activity.

Despite the price appreciation, staking activity has weakened. The total value staked in the VELVET protocol fell by approximately $160,000 in a single day to roughly $1.5 million, continuing a downward trend from $2.26 million seen in mid-July. This decline in staking may indicate that holders are reducing yield positions, potentially to facilitate profit-taking.