VELVET: Spot Bids Absorb 75% Weekly Drawdown as Longs Eat $490K of Liquidations
OI down 28% to $21.07M, funding still positive at 0.0050%, and $1.58M in spot buying contrasts with an 88% long-side liquidation skew.
VELVET is down 75% on the week, with a 16% leg lower in the past 24 hours alone, but the derivatives tape shows leveraged longs still refusing to fully unwind. Perpetual open interest has fallen 28% over the period, from $29.36 million to $21.07 million, yet funding has stayed marginally positive at 0.0050% — a sign that net positioning across the market remains tilted long even into the drawdown.
Liquidation flow is almost entirely one-sided
Of $558,320 in total liquidations recorded over the past 24 hours, $490,520 — about 88% — came from long positions being forced out. CoinGlass data puts the Taker Buy/Sell Ratio at 0.95, meaning sell-side volume in perpetuals is modestly outpacing buy-side flow.
The combination of contracting OI and long-heavy liquidations reads as leveraged capital being squeezed out rather than flipping to shorts. Shorts are capturing the asymmetric payout on this move, but the setup looks more like a stress test of long conviction than a wholesale capitulation to the downside.
Spot flow tells a different story
Away from the perp market, spot demand has held firm. Total spot purchases of VELVET hit $1.58 million for the week, with $781,000 of that landing as net inflow in just the last 48 hours.
Positive spot netflow during a sharp price decline typically signals accumulation rather than exit — traders treating the lower price as an entry rather than a reason to sell. Spot buyers carry no funding cost and no liquidation risk, so sustained buying there can act as a structural floor even while the leveraged book keeps flushing.
Trailing returns still frame the bull case
Despite the week’s collapse, VELVET remains up 59% on a trailing 30-day basis and 533% over the trailing quarter — a gap nearly tenfold the monthly figure. That cushion of unrealized gains for earlier entrants likely explains why funding hasn’t flipped negative and why long liquidations, while dominant, haven’t fully unwound net long exposure.
The near-term technicals still argue for continued volatility: a sub-1.0 Taker Buy/Sell Ratio, shrinking OI, and long-skewed forced closures. Whether the $1.58 million in spot accumulation is enough to stabilize price hinges on whether perp-side selling pressure eases from here, or whether another leg down triggers a fresh round of long liquidations.
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