Why are traders massively fleeing leverage?
Risk appetite has evaporated. According to reported on-chain data, credit withdrawals (borrowings) on the NEXO platform have suffered a dramatic plunge. In January 2025, activity was at its peak with $136.63 million in withdrawals, signaling blind confidence from retail investors.
Today, the situation is radically different. After a local peak in June, volumes collapsed to reach a critical floor of approximately $22 million in November, before struggling to stabilize around $24 million in early 2026. This retracement of over 80% indicates extreme risk aversion: traders are paying down their debts and exiting the market, fearing increased volatility.
This phenomenon is not isolated. The Aave protocol is experiencing a similar trend, with Ethereum borrowings dropping from 1.2 million ETH to just 300,000 ETH. This leverage purge is cleaning up the market, but it also deprives prices of the fuel needed for an immediate rally. Over the past few days, liquidity has been returning, but in a “cautious” manner according to CryptoQuant.
Can NEXO’s price survive this purge?
From a chart perspective, the punishment is immediate. The NEXO token is currently trading in a price zone between $0.66 and $0.68, showing a significant decline over the last 24 hours. The absence of credit demand acts as a natural brake on upward movement.
Technical analysis:
- Critical support: The $0.65 zone must absolutely hold. A break of this level could trigger bearish acceleration toward historical lows.
- Key resistance: To hope for a reversal, bulls must reclaim $0.76, a level that would correspond to renewed speculative interest.
- Indicators: The stabilization of credit withdrawals since December suggests that the worst of the capitulation may be over. If this floor holds, an accumulation phase could begin.
Is it time to buy the fear?
The credit collapse is a double-edged sword. On one hand, it signals a market “cleaned” of its speculative excesses, often a prerequisite for a healthy bull run. On the other hand, it shows that liquidity is becoming scarce.
Currently, NEXO has broken its major bullish trendline on higher timeframes. Caution is warranted. However, for short-term traders, DCA buy orders can be placed in the massive order block zone over the next 2 weeks between $0.57 and $0.50 to capitalize on a potential bounce toward a trendline retest at $0.85. This offers a potential 50% upside for the most patient traders.
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