The Lending Volume on AAVE Exceeds 1 Billion USD Since 20/1/2026 – Expanded Operating Range, What Signal for the Market?
Let's take a look back at the Lending & Borrowing data on AAVE – one of the leading DeFi platforms:
🔸 Since 20/1/2026 until now (12/2/2026), the total loan amount has exceeded 1 billion USD!
🔸Borrowers started when BTC was ~90,000 USD and ETH was ~3,100 USD, extending through the current strong price drop period.
🔸Typically, during periods of high volatility, the lending wallet addresses operate within a narrow range: 5,000–7,000 USD/BTC and 500–700 USD/ETH.
🔸But this time, the margin is significantly widening – a rare phenomenon, indicating that borrowing activity is more 'intense' than ever!
There are two most interesting perspectives on this phenomenon:
🔸Perspective 1: Hindering price recovery
Borrowers are creating a burden of excessive leverage, slowing down the rebound process. Borrowing so much could lead to a liquidation cascade if prices continue to drop, prolonging the bear market.
🔸Perspective 2: A catalyst for recovery
This is a strong price support position, as long as the Health Level (HL) is optimized and always ready to rebalance. These loans can absorb sell-offs, laying the foundation for a pump when the market turns.
Quick analysis from the market perspective:
🔸Increased borrowing reflects that DeFi cash flow is still active even though crypto dips – it could be a positive signal if borrowing is to accumulate (like buying the dip).
🔸But if leverage is too high → Liquidation risk increases, especially when the margin widens (easily hitting margin call).
🔸History shows: Borrowing spikes often accompany large volatility, but if HL is good, it can be a 'launchpad' for recovery.
Which perspective do you lean towards?
Perspective 1: Borrowing more = hindering rebound? Or Perspective 2: This is 'support' for recovery?
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