As onchain banks surge past $70B in deposits and $27B in active loans, one of the more under-appreciated dynamics is what’s happening beneath the surface with repayments and liquidations, especially the scale of forced deleveraging. November just posted the highest liquidation volume ever, with more than $422M in positions forcibly unwound. Combined with October, that brings two-month forced deleveraging to a staggering $727M. Importantly, this occurred without contagion or protocol instability and instead was a meaningful validation of onchain risk frameworks
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Happy RISK-OFF December, everyone!
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We enter the week coming off the third consecutive week of digital asset ETP outflows, this time totaling $2B, the largest weekly selloff since February’s $2.9B. So far this month, $BTC has seen over 7% of its YTD inflows (-$2B) exit, while $ETH has shed 8.5% (-$1.1B). The rotation out of majors is becoming increasingly visible in the flow data, and importantly, none of it is moving into alts. Capital is simply exiting the ecosystem, an infinite free fall down the risk curve. One particularly interesting angle: at $96,000, every short-term BTC holder (154-day holding period or less) is now underwater. That’s an entire cohort sitting in unrealized losses, creating an environment where forced selling and volatility can accelerate quickly. Only the strong survive from here.
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