Santiment: Leveraging lending and borrowing metrics to decode crypto market cycles
The post Santiment: Leveraging lending and borrowing metrics to decode crypto market cycles appeared on BitcoinEthereumNews.com.
Santiment analytics platform revealed that DeFi lending and borrowing metrics can help investors better analyze crypto market cycles. The firm also noted that interest rates, debt levels, and liquidation events can reveal when markets are overheated or bottoming out. The analytic platform showed that when borrowing rates spike above 10% to 15%, it often signals a market top driven by excessive demand for leverage. Low and flat rates over several weeks can indicate a market bottom, where speculation has died down, and re-entry points may appear. DeFi lending and borrowing metrics help investors analyze crypto market cycles Santiment analytics acknowledged that lending and borrowing data can provide traders with unique insights into market conditions in lieu of focusing on price action or social sentiment. The firm argued that the metrics can help investors identify market extremes, both the overheated periods where caution is needed and the cooling periods that might signal buying opportunities. The analytics platform highlighted the concept of the “Value of Money,” where interest rates on lending platforms like Aave and Compound reflect supply and demand for capital in crypto markets. The firm stated that interest rates rise when borrowing demand increases. Santiment also argued that extreme interest rate spikes often signaled market tops, while flat or low rates may indicate market bottoms. The analytics platform believes that the framework reflects the behaviour of market participants, where the determination of the value of money is a direct expression of general market sentiment. The financial data firm noted that key indicators included stablecoin supply rate, borrowing rate, and supply/borrow ratio. Source: Santiment. The effect of interest rates on crypto markets. Santiment noted that interest rates above 10-15% indicated overheated conditions and market tops, where borrowers are willing to pay high costs to gain leverage. The firm also suggested that falling…
Filed under: News - @ March 27, 2025 6:27 am