Venice Token ($VVV) fell 13% to $16.03 at press time, a decline that contrasted sharply with the project's improving protocol-level performance.

Venice is a privacy-focused AI inference platform that launched its token earlier this year, and $VVV is designed to give holders access to its API services, tying token demand to platform usage over time.

According to DeFiLlama data, Venice recorded all-time-high quarterly earnings of $1.1 million, while monthly earnings also reached a record $654,000. The earnings growth suggested that activity and platform usage increased despite recent market turmoil.

Even so, stronger protocol performance has yet to support $VVV's price, a pattern seen across much of the altcoin market, where token prices have often decoupled from underlying fundamentals during broader sector weakness. This divergence raises two questions: Is $VVV entering a bearish phase, and which traders are driving the decline?

Are derivatives traders pressuring $VVV?

The perpetual market shows the clearest signs of weakening trader sentiment. The funding rate fell from 0.0141% on August 28 to 0.0001% at press time. Funding rates are periodic payments between long and short positions in perpetual futures markets, used to keep contract prices anchored to the spot price.

Because the funding rate remains marginally positive, the decline points to weakening long demand rather than confirmed short dominance.

However, $VVV's long/short ratio fell to 0.86, according to CoinGlass. A reading below one indicates that short accounts outnumber long accounts within the measured market.

Together, both metrics point toward a weaker derivatives bias, and continued short positioning could maintain pressure on $VVV's price.

Are spot traders buying $VVV?

By contrast, the altcoin's spot market netflow has remained negative over recent sessions. Approximately $267,000 left centralized exchanges within 12 hours, and negative netflows have persisted for three days.

These outflows could indicate that holders were withdrawing $VVV from exchanges, reducing immediately available selling supply. However, negative netflows alone cannot confirm fresh buying or long-term holding.

$VVV therefore faces a clear market split: derivatives traders lean bearish, while spot outflows suggest that exchange-side supply is tightening.

If spot accumulation continues, $VVV could attempt a near-term recovery. However, persistent derivatives pressure could delay that move despite Venice Token's record earnings.

Summary

Venice Token fell 13% to $16.03 despite record protocol earnings of $1.1 million for the quarter. $VVV's funding rate fell sharply but remained marginally positive, showing weaker long demand rather than confirmed short dominance.