Velocity of circulation is a result, not a cause. It is commonly a passive resultant of changes in people's relative valuations of money and goods.
Velocity of circulation cannot fluctuate for long beyond a comparatively narrow range, because it is closely tied (except for speculation) to the rate of consumption and production.
V does vary with the volume of speculation, but an increased volume of speculation may accompany either rising or falling prices.
V is never an independent factor on the side of money, because the transfer of goods must speed up, other things being equal, to an equal amount. It is just as valid to think of the velocity of circulation of money being caused by what happens on the side of goods as by what happens on the side of money.
Actually it is psychological factors — desire to buy and sell, produce and consume — that determine V.
Monetary theory would gain immensely if the concept of an independent or causal velocity of circulation were completely abandoned. The valuation approach, and the cash holdings approach, are sufficient to explain the problems involved.