I really, really wanted to write about this over the past few days, but just didn’t have the space to do it. Now I do. Anyway, this happened this past Tuesday.

On September 29, Alloya’s wholly owned Appex CUSO minted 1 million CUUSD tokens on Ethereum, representing $1 million. This deserves more attention than another partnership to explore the possibility of scheduling a meeting.

Alloya serves more than 1,300 credit unions and related entities. The pilot involves a limited group, not 1,300 institutions suddenly transacting on-chain. Still, there’s an existing financial network behind this experiment.

Banking groups have warned that yield-paying stablecoins could drain deposits and weaken lending. And because they (big banks) care so much, they’ve used fear mongering and ‘think of the little people’ to scare the populace and politicians that small community banking would be at risk.

Which makes this really funny because credit unions operate almost exclusively in smaller, community markets.

Alloya’s response is to own the issuing business. Appex handles token issuance and reserve administration, with the stated objective of keeping innovation, capital, and economic value inside the credit union system.

CUUSD remains an institutional pilot. It isn’t available to consumers, pays no yield, and isn’t federally insured. Approval to operate as a permitted payment stablecoin issuer hasn’t been granted or guaranteed. No banking funeral just yet.

But building a credit union-owned alternative instead of waiting for a bank’s product presentation? That’s a fairly substantial middle finger to banks. 🖕

BitcoinIRA gives you access to 100+ cryptocurrencies, one-click crypto bundles, and staking rewards on select assets - all inside a self-directed crypto IRA.

^{*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.}

Hooray, hooray, it’s Leverage Absorption Ratio (LAR) day. 👏

A lot of people watch open interest. More contracts, more conviction, right? Sort of. That number on its own doesn't tell you whether a market can carry all that borrowed money, or whether it's one bad candle away from doing the same thing that happens to a sousaphone player when he misses a step on the fifteenth flight of stairs. That's the LAR's job.

It looks at three things: how much leverage is parked in a ticker’s futures market, how hard price is swinging, and whether longs or shorts are paying up to keep their bets on. Then it stacks today up against that ticker’s own history. A light reading means there's plenty of room in the building. A heavy one means the bar is past fire-code capacity and somebody's eyeing the alarm.

It doesn't call price. It tells you whether the leverage underneath a move is sturdy or just hoping nobody sneezes - and that's the difference between a rally you can lean on and one that turns into a liquidation flush.

Let’s get into it. 👇

Bitcoin's leverage gauge is sitting smack in the middle of its range, and it took the scenic route getting there - swinging from light to heavy and back over two weeks like a screen door in a windstorm.

So what pushed price from about $81,000 to nearly $87,000? Not new leverage. Open interest in BTC terms shrank while price climbed, which means shorts were getting dragged out of the trade, not longs piling in. Liquidations say the same thing. Shorts ate roughly $840 million in forced closures over the stretch, close to double what longs lost, and a big chunk of that hit on Sept. 21 when BTC ripped almost 7% higher.

Volatility didn't budge. Every wobble in the gauge came from funding - traders got cheerful, then gloomy, then cheerful again, and the reading followed their mood around the room.

Since August 2023: back then Bitcoin was carrying about as much leverage, relative to how much it was moving, as it ever has in this data. Price has nearly tripled since, and open interest in BTC terms is up a whole 5%. The futures crowd never really followed the rally. Spot buyers and the ETFs did the lifting.

Why Neutral: the middle of the range has historically been Bitcoin's comfortable spot - it's been followed by gains two weeks later more often than any other reading. But this rally ran on squeezed shorts, and that tank is close to empty. Nobody's crowded in either direction, so there's nothing to fade and nothing to ride. 💁‍♂

ETH is carrying more leverage, relative to how much it's moving, than at almost any point in this data. It's been parked in the heaviest bucket for nearly the entire two weeks and is knocking on the door of the record it set back in June. 📆

Open interest in ETH terms only nudged up a few percent while price climbed to about $2,750. The real culprit is that ETH stopped moving. Volatility dropped to one of its quietest stretches on record, while the pile of open contracts sits near its biggest.

Picture a packed elevator that hasn't moved in a while. Everybody's calm, the doors are shut, and funding says most of the people inside are betting on going up. Liquidations were close to even, so nobody's been tossed out yet.

Since August 2023: open interest in ETH terms has more than doubled while price is up about 50%. Leverage has outrun the asset.

Why Bearish: ETH's own history is not kind to this setup. When the gauge has sat this heavy, ETH was higher two weeks later less than four times out of ten, and it usually took a decent dip somewhere along the way. A quiet market, maxed-out leverage and longs paying to stay in is how you get a long squeeze, not a breakout. 😶

Written by yours truly. Super data heavy. Right up your alley. 👀

It’s once a week, on Mondays. Let me know what you think! 👇

Solana's gauge has barely moved in two weeks. It's sitting in the upper-middle of its range, one notch below heavy, and the only real wobbles came on the two days funding briefly flipped negative. ➖

SOL climbed about 9% to around $123, and the futures crowd didn't chase it - open interest in SOL terms stayed pinned near 31 million coins the whole way up. Shorts took more of the liquidation hit, most of it on Sept. 18 when SOL jumped almost 11% in a day.

Volatility cooled off a bit and sits on the calm side for SOL. Leverage is elevated, not stretched. Nothing here is screaming.

Since April 2024: there are about two and a half times as many SOL tied up in futures now, volatility is roughly half what it was, and price is lower. More leverage, less movement, and nothing to show for it on the chart.

Why Neutral: this upper-middle zone has been tolerable for SOL, a bit better than a coin flip two weeks out. The heaviest zone, one notch up, is where things have gone wrong. SOL isn't there yet, and flat open interest on a rally says the crowd isn't getting greedy. If open interest in SOL terms starts climbing alongside price, that changes the read in a hurry. ⏩

Cardano is the one ticker where leverage is actively chasing price, and its digging deeper into heavy territory because of it. It spent most of the last two weeks in the top bucket. 🪣

ADA rallied about 14%, better than ETH or SOL managed, and this time the futures crowd jumped right in. Open interest in ADA terms rose about 6%, and in dollar terms it grew by about a fifth. Funding was positive on 13 of 14 days and ran the richest of the six tickers we’re looking at today. Longs are paying up to stay long, every single day.

And nobody's been tested. Liquidations on both sides were pocket change, while open interest in ADA terms is close to the most it's been in this data.

Since April 2024: price has been cut nearly in half, and open interest in ADA terms has more than tripled. That's a lot of conviction for a coin that hasn't paid anyone back for it.

Why Bearish: rising price, rising open interest, longs paying every day and a gauge pinned in the heavy zone. That's the textbook crowded long. ADA's history agrees - when it's been this heavy, it was higher two weeks later less than four times out of ten, and the typical dip along the way was about 11%. 😱

NEAR more than doubled in three weeks, from about $2.37 in mid-September to just under $5, and the leverage gauge has been sliding lower the whole time. It started the window firmly in heavy territory and has slipped down a notch. 😕

Why would it ease on a monster rally? Because the market got a lot wilder. NEAR's volatility is near the top of its range - it's rarely been this violent - while open interest in NEAR terms barely moved. The existing contracts just got more expensive, and the price swings are big enough to soak them up.

Longs are the ones getting picked off inside the rally. They took noticeably more liquidation pain than shorts over the stretch, including about $17.5 million on Sept. 28 when NEAR dropped about 10%. Funding has cooled off from its hottest stretch and now runs a touch below normal.

Since April 2024: open interest in NEAR terms is more than seven times bigger, the largest leverage build of anything here, and price still sits below where it was.

Why Neutral: NEAR is the odd one out. For NEAR, heavy leverage has usually meant momentum - when the gauge sat in the top zone, it was higher two weeks later more often than not, and by a decent margin. The problem is it's now slipping into the zone just below that, which has gone poorly for NEAR. Leverage near highs, volatility near highs and longs getting picked off on the way up isn't a clean long case. It isn't a clean short either. 🧠

Quant nearly quadrupled in 14 sessions, from about $63 to about $248, and broke the leverage gauge in the process. The reading fell from the upper end of its range straight through the floor. 📉

Does that mean leverage is light? Not even close. Open interest in QNT terms tripled, and in dollar terms it's roughly twelve times bigger. The gauge only reads low because QNT's volatility went parabolic - the most violent stretch in this data by a mile - and funding went so negative it maxed out the adjustment. Divide anything by that much chaos and it looks small.

Funding is the real story. Shorts are paying about seven times the normal rate to bet against this move, and they've already been burned once. On Sept. 27, when QNT jumped 89% in a day, about $15.7 million of shorts got wiped out.

Since April 2024: this one rhymes. The gauge read light back then too, with funding also deeply negative. Open interest in QNT terms is about three and a half times larger now, and price is roughly two and a half times higher.

Why Neutral: the signals point in opposite directions and neither one is trustworthy at this volatility. QNT's history says readings this low usually led to lower prices - it was higher two weeks later only about one time in four. The crowded shorts say another squeeze is on the table. Add a futures market small enough for one whale to shove around. 🐳

Brazil’s latest blockchain assignments: investment fund records and renewable-fuel data. Not exactly casino material. But when the participants include BTG Pactual, Petrobras, and a financial infrastructure operator with R$22 trillion in registered assets… ya, we’re getting into a different world. 🌎

CSD BR and Ripple are bringing the XRP Ledger into Brazil’s financial infrastructure, starting with BTG Pactual investment fund shares.

Meanwhile, Petrobras, PUC-Rio, and the Cardano Foundation have developed two R&D applications for making renewable-fuel claims easier to verify.

CSD BR’s first phase involves live financial records; Petrobras’ projects remain R&D. Neither announcement puts an entire industry on-chain overnight. Together, though, they show Brazilian institutions assigning public blockchains real responsibilities. Less conference-panely prophecy. More paperwork somebody needs to trust. 🫂

Email me, Jonathan Morgan, feedback; I’d love to hear from you. 📧
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