Velvet Price Analysis – $0.88 Target Comes Into Focus as Bulls Defend $0.605 Breakout

Highlights:

• Velvet surges as rising trader activity and open interest strengthen short-term bullish momentum.
• Velvet’s new staking reward structure could reduce supply and attract more long-term investors.
• VELVET targets $0.88 after breaking resistance, though US PPI data remains a key risk.

Velvet (VELVET) is making double-digit gains on a day that the broader cryptocurrency market is mixed. At press time, VELVET was up 18.96% to trade at $0.74. However, VELVET trading volumes have dropped during the day, down 40.73% to stand at $24.13 million. The drop in trading volumes is a positive signal for VELVET. It means the average holder is not keen on exiting their positions despite the intraday rally. Going forward, the odds are high that VELVET could keep pushing higher.

Rising Trader Activity Could Push Velvet Higher Short Term

A key factor that could send VELVET higher is the rising trading activity around it. VELVET trading volumes have recently shot up by over 5000%. Open interest in VELVET has also rallied by 65%. This means traders are aggressively buying VELVET, both in spot and leveraged markets. The same is reflected in the price action as demand starts to outstrip supply.

As the buying momentum continues to rise, and the rest of the market stays directionless, capital flows out of other cryptocurrencies and into VELVET. This could see the price hit even higher levels in the short term.

$VELVET just touched the $1.1B mcap mark today and has retraced back to $682M

still doing over $630K in volume while traders keep coming in

and it’s currently #1 trending on @Velvet_Capital

after that move I’m still expecting another leg up watching this one closely pic.twitter.com/a6fLRDvyjO

— VEGA (@VegaSnipes) August 11, 2026

New Reward Structure Drawing In Long-Term Investors to Velvet

VELVET is also getting a boost from the change in its rewards structure. Yesterday, August 12, Velvet announced a reward structure that incentivizes investors to pivot more towards long-term staking. This is a big deal as long-term staking can have a positive impact on the supply of Velvet over the long term.

Investors anticipating the change in staking dynamics to push the price higher are taking positions, in the belief that Velvet is undervalued. As capital pivots into this long-term holding, the price could keep pushing higher going, and outperform the broader market.

VELVET Rewards: Epoch 11

Thank you to everyone who shared feedback on the rewards program.

We’ve read it carefully, and it has directly shaped how the next distribution will work.

Epoch 11 rewards now work for you from day one.

What’s changing

For Epoch 11:
• 12% of your… pic.twitter.com/fVmOEQcKPk

— Velvet | SocialFAI (@Velvet_Capital) August 11, 2026

Easing US Inflation Could Add to Velvet Upside Price Action

The macro environment also favors a continuation of the momentum Velvet has built up in the last 24 hours. On August 12, US CPI data came out showing that inflation was easing in the US. This has significantly lowered the probability of the Federal Reserve hiking rates in September, as was widely expected.

At the same time, the Iran war tensions appear to have subsided. This further adds to the risk-on sentiment that is building across the financial markets. As sentiment shifts, cryptocurrencies that are already showing upside momentum could attract the most capital. This puts Velvet in a unique position to go parabolic in the short to medium term. 

Sudden Changes in the Macro Environment Could Pose a Risk to Velvet

However, Velvet, like every other cryptocurrency, faces a major risk event today. Early in the US session, the US PPI is set to come out. If the data comes out pointing to cooling inflation in line with the CPI data, risk-on markets could rally across the board. However, if it points to worsening inflation, a correction could follow.

Velvet would be particularly hit because a sizeable number of traders are now in profit. As such, the profit-taking that would follow, coupled with short selling, could see the price collapse by double digits in a short time. This is likely a short-term event, though, and overall, the long-term trajectory for Velvet is up.

Technical Analysis – VELVET Breaks Out of Multi-Week Consolidation

After weeks of consolidation between the $0.388 support and $0.605 resistance, VELVET broke out yesterday, August 12. If bulls sustain the momentum built up so far, VELVET could rally to $0.88 in the short term. However, if the bulls lose momentum, two scenarios could play out in the day.

The first is a consolidation above $0.605, now support. The second is where bears take control and push Velvet through $0.605. In such a scenario, Velvet could drop to $0.388 in the short term. Of these scenarios, a rally to $0.88 is more likely. This is due to growing risk-on sentiment across the market and the fact that trader activity on Velvet is up strongly.