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Ethereum Lending Hits $28 Billion After Aave Proves DeFi’s Crisis Shield in Weekend Crash

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Active loans across lending platforms on Ethereum

Ethereum’s on-chain lending ecosystem has reached a new milestone, with active loans surpassing $28 billion as of January 2026.

Central to this growth is Aave, the leading Ethereum-based lending protocol, which controls approximately 70% of the network’s active lending market.

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Aave’s Automated Liquidations Prevent DeFi Contagion Amid Weekend Crash

Data on Token Terminal shows that the growth in active loans across Ethereum-based lending platforms achieved a tenfold increase from January 2023 lows.

Active loans across lending platforms on Ethereum
Active loans across lending platforms on Ethereum. Source: Token Terminal on X

This milestone highlights Ethereum’s continued dominance in DeFi. It gives it a roughly tenfold advantage over competing networks such as Solana and Base.

The surge in lending activity, while a signal of DeFi’s expanding adoption, also raises questions about systemic risk.

In 2022, elevated loan volumes contributed to waves of liquidations that exacerbated broader market downturns. By Q3 2025, crypto lending had reached a record $73.6 billion. This represents a 38.5% quarter-over-quarter increase, and nearly tripling since the start of 2024.

According to Kobeissi analysts, this was driven largely by DeFi protocols benefiting from Bitcoin ETF approvals and a sector-wide recovery.

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While leverage in DeFi remains far below that in TradFi sectors—representing just 2.1% of the $3.5 trillion digital asset market, compared to 17% in real estate—its concentration in algorithmic lending platforms like Aave amplifies the potential for rapid, automated liquidations.

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Weekend Crash Highlights Aave’s Role as DeFi’s Stabilizer Amid $2.2 Billion Liquidations

The late January 2026 weekend market crash tested this system under extreme stress. Bitcoin dropped sharply from around $84,000 to below $76,000 amid:

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  • Thin weekend liquidity
  • Geopolitical tensions in the Middle East, and
  • Pressure from the US government funding uncertainties.

Over $2.2 billion in leveraged positions were liquidated across centralized and decentralized exchanges in just 24 hours.

Aave’s infrastructure played a crucial stabilizing role. The protocol processed over $140 million in automated collateral liquidations across multiple networks on January 31, 2026.

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Despite high Ethereum gas fees spiking above 400 gwei, which temporarily created “zombie positions” where undercollateralized loans hovered near liquidation thresholds but could not be profitably cleared immediately, Aave handled the surge without downtime or bad debt.

Aave’s performance prevented what could have been a far more severe contagion across DeFi. Had the protocol failed, undercollateralized positions could have accumulated into bad debt. Such an outcome would trigger cascading liquidations and potential panic across the ecosystem.

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Other protocols, including Compound, Morpho, and Spark, absorbed smaller liquidation volumes. However, they lacked the scale or automation to fully replace Aave.

Lending Protocols by Ranking
Lending Protocols by Ranking. Source: DefiLlama

Even large ETH holders, like Trend Research, who deleveraged by selling hundreds of millions of dollars in ETH to repay Aave loans, relied on the protocol’s efficiency to mitigate further market stress.

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The weekend crash highlights both the opportunities and vulnerabilities inherent in Ethereum’s lending ecosystem.

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While active loans and leverage are rising, Aave’s resilience signals that DeFi’s infrastructure is maturing.

The protocol’s ability to absorb large-scale liquidations without systemic failures highlights Ethereum-based lending as a stabilizing force in volatile markets. It reinforces its “flight-to-quality” reputation among both institutional and retail participants.

AAVE Price Performance
AAVE Price Performance. Source: BeInCrypto

Despite this bullish outlook, the AAVE token is down by over 6% in the last 24 hours, and was trading for $119.42 as of this writing.

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Crypto World

Pi Network Price Predictions for this Week

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pi_network_price_chart_0602261


Let’s have a look at some important PI price targets as the cryptocurrency continues to fall toward new all-time lows.

PI reached a new all-time low at 14.6 cents. Is this the bottom?

PI Network (PI) Price Predictions: Analysis

Key support levels: $0.15

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Key resistance levels: $0.2

PI Downtrend Accelerates

PI closed January with a new all-time low after briefly touching $0.146. Since then, buyers have pushed the price above 15 cents, but this is unlikely to hold if the downtrend continues.

Worst, there is no sign of a possible bottom yet, especially when major market leaders such as BTC and ETH continue to fall.

pi_network_price_chart_0602261
Source: TradingView

Aggressive Selloff since the start of 2026

As soon as the new year started, PI bears intensified their presence on the orderbook with massive sell orders. This led to a sharp 25% crash in mid-January. This pressure appears to continue in February, as can be seen on the chart.

pi_network_price_chart_0602262
Source: TradingView

Daily RSI Extremely Oversold

The daily RSI has been in the oversold region (below 30) since the start of the year, and it has not moved out of it. This is an extremely bearish signal, but it does hint at a possible bounce in the future, since prices rarely remain in extremes for long.

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Should a bounce materialize later, watch the resistance at 20 cents, which could stop any relief rally.

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pi_network_rsi_chart_0602261
Source: TradingView

 

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Bitcoin Sees First $69,000 Dip in 15 Months as ‘Someone Enormous’ Sells

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Bitcoin Sees First $69,000 Dip in 15 Months as 'Someone Enormous' Sells

Bitcoin (BTC) fell below $70,000 on Thursday as suspicions over coordinated selling boiled over.

Key points:

  • Bitcoin tumbles below 2021 highs for the first time since November 2024.

  • Gold and silver volatility spark copycat BTC price maneuvers as lower targets stay in play.

  • Market participants say that large entities are selling BTC on a schedule.

Bitcoin collapses to $69,000 in fresh cascade

Data from TradingView captured new 15-month BTC price lows of $69,100 on Bitstamp during the Asia trading session.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

The latest plunge marked Bitcoin’s first trip to the $60,000 range since early November 2024. In doing so, it sparked $130 million of crypto long liquidations over four hours, per data from monitoring resource CoinGlass

Crypto liquidations (screenshot). Source: CoinGlass

Bitcoin moved in step with a flash reversal on precious metals. 

Gold, which the day prior had seen a relief bounce to $5,100 per ounce, fell as low as $4,789 Thursday before again targeting the $5,000 mark.

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Silver, meanwhile, gyrated between $90 and $73 per ounce as volatility stayed in control.

XAG/USD one-day chart. Source: Cointelegraph/TradingView

“$BTC has entered a key support zone,” trader CW warned in a post on X

“If it fails to support the 69k level, another significant decline could occur.”

BTC/USDT one-day chart. Source: CW/X

Earlier, traders gave various BTC price bottom targets of interest, with these including the area around $50,000. Directly below $69,000, meanwhile, lies the key 200-week exponential moving average (EMA) support trend line.

BTC/USD one-week chart with 200EMA. Source: Cointelegraph/TradingView

Reacting, crypto entrepreneur Alistair Milne agreed with observations from longtime trader Peter Brandt. Bitcoin, the latter argued, was the victim of “campaign selling.”

“Agree with this take. Someone enormous is unloading to a deadline,” Milne responded on X.

The post likened the current sell-side pressure to when the government of Germany distributed its BTC holdings to the market, suggesting that coins were being “handed over to OTC desks who simply execute.” 

“For me it started 14th Jan,” he added.

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Coinbase Premium undercuts Liberation Day low

Nic Puckrin, CEO of crypto education resource Coin Bureau, likewise flagged “large selling” by whales during US hours.

Related: Bitcoin, crypto ‘winter’ soon over, says Bitwise exec as gold retargets $5K

As Cointelegraph reported, the negative Coinbase Premium, which measures the difference in price between Coinbase’s BTC/USD and Binance’s BTC/USDT pairs, highlighted the lack of overall US Bitcoin demand.

“The Coinbase Premium is the lowest it has been in over a year. It’s even lower than post liberation day tariffs,” Puckrin noted.

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He added that selling pressure would continue until the premium changed course.

Coinbase Premium Index. Source: Nic Puckrin/X

Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, said that “OG” whales were behaving as if BTC/USD were at all-time highs.