Velvet price surges 300% to record high after Aerodrome liquidity migration

Velvet price has surged more than 300% in three days, climbing to a new all-time high above $2 after the protocol consolidated its Base network liquidity on Aerodrome Finance and expanded its synthetic pre-IPO trading markets.

According to Velvet, the protocol migrated all of its protocol-owned liquidity on Base to Aerodrome Finance, making the decentralized exchange its sole liquidity venue on the network. The move concentrated trading depth in one marketplace, reducing slippage and tightening spreads.

At nearly the same time, Velvet rolled out synthetic markets offering tokenized exposure to private companies, including SpaceX, drawing fresh attention from speculative traders and pushing the token from around $0.39 on June 26 to an intraday high of about $2.15 on June 29.

Technical indicators continue favoring buyers

Momentum accelerated after buyers forced VELVET above the $0.60-$0.67 resistance area that had capped previous recovery attempts. The breakout triggered a rapid move higher as short sellers exited positions and fresh buyers entered the market.

The four-hour chart shows VELVET has entered price discovery after printing a record high near $2.15 before easing toward $1.66 at the time of writing. Even after the pullback, the token continues trading above the key 61.8% Fibonacci retracement level around $1.48, a zone that could now act as the first major support if selling pressure increases.

Technical indicators continue to favor the bulls despite signs that the rally is cooling. The Relative Strength Index remains above 70, indicating bullish momentum, although it has retreated from more extreme overbought readings.

At the same time, the Chaikin Money Flow indicator remains positive near 0.29, suggesting capital continues flowing into the asset despite profit-taking near record levels.

A recovery above the 78.6% Fibonacci level near $1.77 could open the door for another test of the $2.15 peak. On the downside, losing support around $1.48 would expose the next retracement levels near $1.27 and $1.06.

Valuation risks remain despite the breakout

Despite the sharp rally, blockchain data points to growing valuation concerns.

Market tracking platforms show Velvet’s fully diluted valuation has climbed to roughly $800 million, while the protocol’s total value locked stands at about $770,000. The large gap suggests the recent price increase has been driven primarily by speculation surrounding synthetic pre-IPO trading and artificial intelligence-linked decentralized finance narratives rather than by growth in on-chain activity.

On-chain transaction records also indicate that market maker DWF Labs transferred nearly 29 million VELVET tokens to centralized exchanges during the rally. Although the transactions do not necessarily confirm immediate sales, they have attracted attention because they coincide with significantly higher trading volumes.

Supply-side pressure could increase further in the coming weeks. Token unlock schedules show approximately 10.4 million VELVET tokens are expected to enter circulation on July 10, potentially adding fresh selling pressure if demand slows after the recent rally.

The surge has also come at a time when the cryptocurrency market remains relatively subdued. With expectations that the U.S. Federal Reserve will keep monetary policy restrictive and the U.S. Dollar Index staying elevated, Bitcoin and Ethereum have traded within relatively narrow ranges.

In that environment, speculative capital has increasingly concentrated in smaller narrative-driven tokens, allowing assets such as VELVET to produce outsized gains even as much of the digital asset market remains range-bound.