【$VELVET Signal】Short squeeze game, high risk of chasing highs and opportunities for pullbacks coexist

$VELVET 1H level RSI surges to 79.63, and the 4-hour level even spikes to 83.64, indicating buying power has been overextended. The 4-hour Bollinger Band upper band is directly broken through, with price operating around 0.1117, far exceeding the upper band at 0.1046, a typical overbought extension state. Market depth imbalance reaches -48.02%, with sell orders far outnumbering buy orders, and funding rate as high as 0.1106%, putting enormous pressure on long positions' cost basis.

Currently, the risk of chasing highs is extremely high, and the risk-reward ratio is not favorable. But momentum has not faded, and going short directly risks being squeezed. The strategy is to wait for a decent pullback, and lay long positions at key support zones below.

⚡Entry/Order: Buy in batches on pullback to 0.08788 - 0.09000 zone.

🛑Stop loss: 0.08129.

🚀Target 1: 0.11181.

🚀Target 2: 0.11226.

🛡️Trade management:
- Execute strategy: After reaching Target 1, reduce position by 50%, and move stop loss to breakeven. If price falls back into the entry zone, exit automatically to protect principal.

The 1-hour MACD fast and slow lines are still diverging upward, but the histogram shows signs of leveling off. The buy volume at the 4-hour level did not expand in sync with new highs, showing a divergence between volume and price. Under such high fee rates, the price holding firm seems more like squeezing out short stops rather than a healthy bullish trend. The support zones below at 0.0893 (1H EMA50) and 0.0877 (daily EMA20) are potential liquidity floors and also our entry zones. Entering here offers a better risk-reward ratio.

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