What NEXO’s 83% credit drop signals about risk appetite in crypto

Retail credit withdrawals on NEXO [NEXO] opened in January 2025 at an elevated $136.63 million. This reflected aggressive leverage deployment during strong market conditions.

As volatility rose, withdrawals fell to $85.3 million in February and $54.4 million in March, signaling forced balance-sheet tightening rather than organic demand cooling.

This early deleveraging implied that retail participants began reducing risk as liquidity conditions shifted.

Activity was then rebuilt. April climbed to $75.2 million, followed by $79.8 million in May and a local peak at $95.8 million in June, while MoM turned positive.

This rebound suggested traders re-engaged leverage into recovering price momentum, using credit to re-enter risk assets.

However, the second half showed structural fatigue.

Withdrawals fell to $67 million in July, hovered at $70 million in August, then slid to $48.5 million in September as market upside stalled.

The decline later accelerated to $22.04 million by November, reflecting risk aversion, thinner liquidity, and reduced speculative appetite. This sustained deleveraging implied balance sheet resets while excess leverage cleared, and marginal buyers retreated.

Withdrawals stabilize in December 2025 and January 2026 at $23.957 million and $23.965 million, respectively, holding close to their lowest levels.

That flattening suggests credit demand may be bottoming, often a precursor to gradual market reaccumulation once confidence rebuilds.

Credit growth meets liquidity stress

Ethereum[ETH] borrowing on Aave [AAVE] began in 2024, subdued near 150,000 to 200,000 ETH, with rates around 2.5–3% amid stabilizing markets.

Demand built steadily, reaching 400,000 ETH by October 2024 as traders increased leveraged positioning.

Momentum accelerated into early 2025; utilization approached 800,000 ETH while rates spiked near 3.5%.

This signaled crowded leverage and rising collateral demand during strengthening ETH price trends.

Borrowing peaked in mid-2025 near 1.2 million Ethereum [ETH], marking maximum speculative exposure. Thereafter, borrowing fell toward 600,000 ETH as deleveraging pressures emerged.

By early 2026, utilization neared 300,000 ETH, and rates eased toward 1.5–2%, reflecting cooling risk appetite and leverage reset.

Key support failure extends NEXO’s downtrend

NEXO extended its downtrend as the price slipped below the $0.901 and $0.947 resistance bands, reinforcing the bearish structure.

Selling pressure accelerated, driving the price into the $0.80 demand zone, where support briefly emerged.

However, momentum weakened further as candles pierced the zone, pushing the price toward $0.73.

Moving averages trended downward and compressed above price, signaling sustained downside control.

RSI hovered near 26, reflecting oversold conditions and weak reversal strength.

This alignment showed persistent distribution rather than capitulation.

As the breakdown structure held, market sentiment tilted risk-off, with bulls requiring a reclaim above $0.90 to stabilize the near-term price structure.

Final Thoughts

• Leverage expanded sharply across credit markets before compressing, signaling a broad liquidity reset as risk appetite weakened.
• Credit flows stabilized, yet NEXO price continued falling, showing market sentiment remained risk-off despite leverage cooling.