3. Leverage and lending data
In the DeFi market, leverage and lending data are important indicators for judging market sentiment:
Surge in borrowing demand: Investors borrowed stablecoins to buy mainstream assets in large quantities, indicating high market sentiment.
High liquidation risk: If the liquidation price of most borrowed funds is close to the market price, it means that investors are overly optimistic and the leverage risk increases.
Usually, a slight fluctuation in the market caused by excessive leverage may trigger a series of liquidations and become the starting point of a bull market crash.