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- Velo joined a growing list of protocols using BlackRock’s tokenized short-term treasury fund for their ecosystem offerings.
- VELO was among the biggest losers today, down more than 22% in the past 24 hours, after disrupting its good run this month.
Velo Labs, the team behind Velo Protocol [VELO]is the latest crypto-native outfit to leverage BlackRock’s first tokenized fund to bring innovative financial products to market.
The company communicated in a September 10 blog that its USDV stablecoin is backed by an investment in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL).
The strategic move is intended to strengthen the utility of the stablecoin and its appeal as a store of value and yield-bearing asset.
Market response
Velo’s announcement initially sparked interest, with many seeing it as confirmation of Velo Labs’ strategic ambition to expand its market reach.
However, the price action of Velo’s utility token, VELO, following the announcement suggested a classic “sell the news” event.
Hours after the press release, speculators quickly took advantage of the earlier price increases, halting a month-long climb in which VELO had gained significant ground.
Source: CoinMarketCap
Notably, Velo adds to a list of crypto projects using BlackRock’s tokenized fund to introduce retail-focused offerings or provide access to return-generating opportunities.
In March, Ondo Finance unveiled plans to move the supporting assets of its US Treasury-backed token (OUSG) into the BUIDL fund.
Ondo explained that his decision to move $95 million into BlackRock’s tokenized fund will make OUSG more useful and facilitate immediate settlements.
Last week, Layer 1 blockchain project Injective launched a tokenized index for the BUIDL Fund, intended to give retail users exposure to the fund.
VELO/USDT technical analysis
TradingView data shows that VELO lost support at $0.0155 overnight and fell to $0.01436 where it started to consolidate.
Although VELO has stabilized after the sharp decline from an intraday high of $0.0193, the price is still down 15% over the past 24 hours.
Source: TradingView
Over the past few hours, the VELO/USDT pair has been trying to make a rebound move after turning the previous resistance level at $0.0143 into immediate support.
The hourly Relative Strength Index (RSI) is hovering below the oversold zone and was last seen at 27, implying that VELO is experiencing significant bearish pressure and is deeply oversold.
Source: TradingView
Read Velos [VELO] Price forecast 2024–2025
A daily close above $0.015 signals a possible continuation of the previous uptrend, which is threatened by the ceiling around $0.02, where VELO struggled in June.
However, further losses below the current support will indicate that the upward pattern is breaking and will call on the stronger support at $0.011, last tested in August.
