- Velodrome Finance (VELO) has gained by more than 108% in 24 hours to hit an ATH of $0.42.
- VELO’s rally started after Binance announced it was listing the token.
As a seasoned researcher who has navigated through numerous crypto market fluctuations, I must admit that Velodrome Finance (VELO) has certainly caught my attention with its astounding 108% surge within a day. The sudden spike in trading volumes and price movements are reminiscent of the wild west days of cryptocurrency trading, where every coin seemed to be a potential gold rush.
Velodrome Finance (VELO) has surpassed the general cryptocurrency market performance by recording more than a 108% increase over the past day. As of now, VELO is being traded at $0.325 with a total market value of approximately $287 million.
According to CoinMarketCap’s data, there was a significant increase in retail involvement as trading volumes skyrocketed over 2,000%. This surge led to erratic price fluctuations. Specifically, VELO experienced a rapid rise from $0.145 to an unprecedented peak of $0.424 within just 60 minutes before correcting itself.
On December 13th, news broke out that Binance would begin trading with VELO, which had already been listed on prominent exchanges like Coinbase. This announcement significantly boosted the popularity of VELO, leading to its rally.
Is Velodrome overbought?
The surge in VELO’s price can be attributed to substantial buying activity, as investors aimed to capitalize on and benefit from this upward trend. According to Lookonchain, one shrewd trader pocketed approximately $448,000 by purchasing VELO tokens within a brief timeframe.
Due to the significant increase, the Relative Strength Index (RSI) has exceeded 86, indicating it’s in an overbought state. This might be a signal for a brief market adjustment or correction in the near future.
If the momentum of listings weakens, and those who purchased due to the fear of missing out (FOMO) begin to sell for a profit, there’s a possibility that the upward trend may slow, potentially causing the prices to decrease.
On Velos one-day graph, the Bollinger bands indicate a condition of being overbought, as the price surge exceeded the upper Bollinger band. Moreover, the expanding bands suggest the significant volatility that has been impacting Velos price movement during the past 24 hours.
Because VELO’s extreme fluctuations and surge in purchase activity suggest it may be reaching its boiling point, there’s a possibility that a decline might follow next.
Reduced DeFi activity could dampen the rally
On the Optimism layer two network, the decentralized finance (DeFi) platform known as Velodrome Finance has experienced a significant decrease in the amount of assets locked within it during the past few months.
As reported by DeFiLlama, the value locked within this protocol currently stands at approximately $92.78 million. Notably, this TVL (Total Value Locked) represents the highest level since November. However, it’s important to note that this figure is over 50% lower than the yearly high of $187 million achieved in April.
A potential decrease in DeFi (Decentralized Finance) activity for VELO might affect its long-term prospects negatively. But, if the trend of gradual growth persists, it could be a positive sign for price fluctuations.
Read Velo’s [VELO] Price Prediction 2024–2025
Can VELO sustain the uptrend?
The surge in VELO’s price can be attributed to its addition to the Binance trading platform, as evidenced by the sharp increase in Relative Strength Index (RSI), indicating intense buying interest. However, if these buyers choose to cash out their profits following the rally, it may lead to a shift in trend direction.
Concurrently, the sluggish network activity, as indicated by the DeFi TVL, suggests that the current rally may not last. As the excitement surrounding listings subsides, it’s expected that VELO could experience a decline.
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2024-12-14 03:03