Observing data from lending platforms can reveal the true pulse of the market.

The utilization rate of ETH loans is particularly high, while WBTC is quite low. What does this reflect? Lenders want to see borrowed coins sold off, pushing the price down; borrowers also want to sell, hoping to repay after the price rises. Both sides have the same demand—they all want to sell.

When sentiment is fully ignited and market atmosphere is very bullish, a bunch of people stand by waiting to sell. This high-price state is most likely to attract big whales to act. Some large short sellers seem to light a fire, and when the price drops, retail borrowers panic and start selling off, causing the price to fall further, creating a vicious cycle.

The reverse also holds true. When market sentiment is bearish and everyone wants to sell, contract traders will take the opposite side and go long, using leverage to force short sellers to cover at higher prices. Interestingly, when gold prices steadily rise, the loan utilization rate soars. This is actually a good time to short—this is also why some aggressive contract traders end up dead due to insufficient leverage, unable to survive the arrival of a black swan event.

The volatility of mainstream coins is most easily manipulated by this logic. Stablecoins have a very low loan utilization rate, as no one is amplifying leverage; Bitcoin’s borrowed amount is also pitifully small, indicating that no one is trying to short with leverage. What does this mean? Lack of emotional fuel, the market is oscillating at the bottom, lacking momentum.

In simple terms: staking ETH > borrowing stablecoins > buying ETH > staking ETH—that’s the cycle where true market energy can be observed.