Part 10/12:
Instead, traders should incorporate measures such as the total value locked in DeFi lending protocols and the market cap of stablecoins—particularly USDC and USDT—as more real-time proxies for actual crypto-native liquidity. Watching these metrics can offer early signals of rising leverage, which often precedes volatility spikes and trend reversals.
Moreover, understanding the role of leverage helps contextualize why Bitcoin can sometimes rally against prevailing liquidity trends or sustain prolonged rallies even in seemingly unfavorable macro conditions. As the crypto ecosystem continues to evolve, internal factors like leverage and crypto-native liquidity will increasingly overshadow external macroeconomic indicators.