According to Odaily Planet Daily, Galaxy Research's latest report indicates that the volume of collateralized lending in the crypto market increased by 27% quarter-over-quarter to $53.1 billion in the second quarter, reaching a new high since early 2022. This growth was primarily driven by increased demand for DeFi lending and a rebound in risk appetite. Bitcoin's recent decline from $124,000 to $118,000 triggered over $1 billion in long position liquidations, the largest since August. Analysts believe this likely reflects profit-taking, but also highlights the market's fragility caused by the rapid accumulation of leverage.

Galaxy analysts say pressure points are gradually emerging. Aave saw large withdrawals in July, pushing ETH lending rates above the staking yield, breaking the "circular arbitrage" logic and causing the Ethereum beacon chain's exit queue to set a record 13 days. Meanwhile, the cost of USDC borrowing in the OTC market has continued to rise since July, while on-chain interest rates have remained stable. The spread between the two has widened to its highest level since the end of 2024, indicating that off-chain demand for US dollars is greater than on-chain liquidity. Galaxy warns that systemic pressure is increasing amidst a surge in loan sizes, concentrated lending, and tightening liquidity. The recent $1 billion liquidation event reminds the market that leverage risk has a two-way effect. (Coindesk)