Nobody Got Liquidated This Week Because There Was Nothing Left to Liquidate 😶

ON-CHAIN ANALYSIS
Nobody Got Liquidated This Week Because There Was Nothing Left to Liquidate 😶

The Leverage Absorption Ratio - What Is It

This Friday newsletter focuses on The Leverage Absorption Ratio (LAR), an on-chain metric I developed to answer the question of how the crypto market is handling leverage. Open interest (OI) tells you how much leverage exists but it tells you nothing about whether the market is handling it. 🤷 

A giant OI increase looks bullish on a chart. It can also mean traders are stacking borrowed exposure faster than price can absorb it. Same number, very different problem.

The LAR scores price efficiency relative to leverage growth. If price is making a real move without open interest exploding underneath it, the market is absorbing leverage fine. If leverage balloons while price barely budges, borrowed money is doing work that spot demand isn't. That's where the liquidation math starts getting interesting.

• LAR above 5 - Smooth Sailing

• LAR 3 to 5 - Check Engine

• LAR under 3 - Danger Zone

A high LAR during a selloff isn't bullish. It can be a very clean leverage purge. So every reading carries a tag:

LAR score + tag = leverage quality and direction. Not a price prediction. A way to separate healthy participation, leverage-driven moves, short-covering, and honest deleveraging before the usual OI chart turns into hindsight with axis labels. 🏷️

ON-CHAIN ANALYSIS
Bitcoin’s LAR 🪙

$BTC ( ▼ 0.7% ) currently has a LAR of 9.5 and a Deleveraging Drop tag. Price and open interest came down in near lockstep. Proportional. Boring. Fine. 🥱

The week before is the one worth your time. Last week is worth a look - price added a hair over one percent, open interest added better than eleven. Danger Zone, tagged Absorption Up, which is the ratio's way of saying that rally was rented.

Open interest sits 57% under its 3 October peak of $52.0B.

So: a market with more than half its leverage gone, volatility at a twelve-month floor, and an absorption score that swung by nearly a factor of ten inside a fortnight. That's a book thin enough that one desk changing its mind moves the score further than price does. 😱

ON-CHAIN ANALYSIS
Ethereum’s LAR 🥈

T3.8. Check Engine, Deleveraging Drop. 🚒

Look at the month instead of the week. Price up 5.9%. Open interest up 7.1%. Funding positive and the fattest of these four majors. $ETH ( ▼ 0.3% ) is the only one of the group where somebody is actively paying to rebuild leverage, and the ratio has opinions about how it's going.

Go back to the week of July 15 and a 10% rally needed twice its own size in fresh borrowed exposure to happen. That still scored Smooth Sailing. Then the week of August 5 (last week) gave the lowest LAR reading out of the entire set we’re looking at today (0.40). Price went nowhere at all while leverage climbed. A Levered Selloff in a week where nothing sold off.

ETH still owns the best long-run record here, 71.7% of weeks in Smooth Sailing. Over the last thirteen weeks, 62%. Volatility printed 0.0156 yesterday (Wednesday), also a twelve-month low.

Everybody's flat. Everybody's levered. 🤑 

ON-CHAIN ANALYSIS
Aave’s LAR 🏦

Out of the four LAR tickers we’re looking at today, $AAVE ( ▼ 2.2% ) has the best absorption record of the four. And I say best in a loose a way as possible. 👍️ 

68% of weeks in Smooth Sailing, a median weekly score of 8.3, the highest of the group. That isn't evidence of a deep bid. It's evidence of a $166M open interest market where price can travel 8% on a Tuesday without leverage having to lift a finger.

Just look at June 5 and the end the week for May 20. Big moves with pretty much zero open interest involved. 

Current read: 3.75, Check Engine, Deleveraging Drop. Zoom to thirty days and open interest is off 17.5% against a 6.7% price decline, with funding negative on 47% of those sessions.

Leverage is leaving faster than holders are. Make of that what you will. 🤠 

ON-CHAIN ANALYSIS
XRP’s LAR 💧

This is where the tags earn their keep. 🫂 

• The score: 5.26. Smooth Sailing.

• The tag: Levered Selloff.

• The week: price down five percent, open interest up twelve.

Read the first line by itself and you'd think XRP handled a rough week with poise. Read all three and you get the actual event: price fell and traders responded by piling more exposure into it.

Funding has been negative on 59% of the last ninety sessions, so most of what's being added is short. That’s a bit crowded, especially when you look at $XRP ( ▼ 1.1% ) parked right on the $1 level.

Open interest is 72.6% below its 13 August 2025 peak of $3.11B. A year ago XRP carried three billion dollars of perpetual exposure. It carries 852 million now, and the last month has gone toward rebuilding it in the wrong direction. One in five sessions over the past thirty days tagged Levered Selloff, three times the rate at Bitcoin or Ethereum.

Eleven of the last thirteen weeks scored Smooth Sailing, the cleanest band record of the four. Now, whether the ‘bottom’ is in, has yet to be determined. But if we are at (or near) the bottom for XRP - a lot of people on the short side could get walloped. 👊 

STOCKTWITS
STOCKTWITS Find The Laggard Before Everyone Else Does 👀

The Stocktwits MCP puts live sentiment, message volume, trending symbols, prices, and real trader conversation directly inside ChatGPT, Claude, Codex, Cursor, and other compatible AI agents. 🤖

Most ‘sympathy trade’ lists are a few companies stapled together by a fashionable noun. AI. Drones. Quantum. Or whatever this mouth breather of a market is yelling into a paper bag that day.

The Stocktwits MCP can make your agent prove the link.

Some prompt ideas:

• Which trending symbols have rising sentiment but flat message volume? I want the crowd early, not already standing on my lawn.

• Where do the posts contradict the data? Flag names with bullish chatter but weak sentiment, falling price, or fading volume.

• Find stocks where three or more independent users are making the are making the same evidence-based case. Ignore copy-paste posts, squeeze fantasies, and “market makers are scared” material.

Example I used in Claude: Start with the 10 highest-ranking trending tickers on Stocktwits. Find leader-laggard pairs only where a real transmission mechanism exists. Require three independent co-mentions, a low Message Volume score, 55 to 75 Sentiment Score, less than 50% of the leader’s daily move, and little squeeze nonsense.

And it did not just throw NVDA, AI, and a prayer at the wall.

It found:

• $JD → $TCEHY: JD fell 8.6%. Tencent fell 1.1%. Shared China-consumption pressure and a still-active Weixin traffic partnership.

• $CSCO → $ANET: Cisco fell 9.2% on AI-networking margin pressure. Arista moved less than 1%.

• $SMCI → $DELL: Same enterprise AI-server spending pool. Dell captured just 38% of Supermicro’s move.

No ten-tab scavenger hunt. No “same sector” fraud. Ask your agent where the move could actually travel, then make it show its work.

Connect the Stocktwits MCP and put live market intelligence inside your AI. 👇️ 

NEWS IN THREE SENTENCES
AI, Stablecoins, & Privacy News 🕵️

🛡️ Zcash Shipped Ironwood At Assembly-Line Speed

More than 330,000 lines of code were added, 130,000 removed, and 1,364 pull requests merged across 12 core repositories through August 7, including 565 in July. Nearly 2 million ZEC had migrated to Ironwood, while Zodl added guided private migration, Tor, Keystone support, and its faster Slipstream sync engine. ZF ended June with $48.7 million in net liquid assets, while ZCG approved no new grants on August 3. Zcash.

🔒 Agent Forge Adds A Privacy Layer

Agent Forge is integrating Secret Network’s confidential computing into its no-code AI agent platform, starting with the light-mode chat interface. Users are expected to gain private model access, verifiable execution, and confirmation that workloads ran inside trusted environments without handing sensitive data to the usual black box. Secret Network.

💵 SODAX Joins Circle’s Stablecoin Table

USDC is already available across most of SODAX’s 20-plus networks, with Circle’s CCTP serving as one of its integrated cross-network routes. Alliance membership does not reroute a dollar by itself, but it puts SODAX closer to the standards and products shaping regulated stablecoin settlement. SODAX.

NEWS IN THREE SENTENCES
Real World Asset Tokenization (RWA) News 🪙

👛 Polygon Offers Unlimited Embedded Wallets For Free

Eligible businesses can now issue unlimited Polygon embedded wallets at no cost, giving customers social-login access without seed phrases or a separate wallet app. The Open Money Stack supports custodial and non-custodial models, crosschain routing across 20-plus networks, spending limits, card-like holds, stablecoin gas payments, and roughly two-second Polygon settlement. Polygon.

NEWS IN THREE SENTENCES
Metaverse, NFT, & Gaming News 🎮️

⚔️ Axie Classic Opens Its Final Official Season

Axie Classic Competitive Season 16 runs from August 12 through September 2 with more than 36,000 bAXS in total rewards. Guild and Arena leaderboards account for 19,000 bAXS, rewarding the top 30 guilds and top 100 players while two Champions Invitational spots remain available. Regular competitive seasons and active development will pause after the Mini Tournaments conclude September 10, with future control expected to move toward the community. Axie Infinity.

NEWS IN THREE SENTENCES
DeFi, DEX, & Lending News 🏦

⏱️ Reactive Staking Rolls Straight Into Season 8

Season 7 closed at block 6,437,662 on August 13 after attracting 192 stakers, 101.8 million REACT, and a 12.69% APY. Season 8 begins one block later with another 1 million REACT reward pool and runs until block 6,816,896 around September 13; prior participants must claim or restake manually. Only a one-month option is available while Reactive finishes its Omni mainnet transition, with the old three-pool menu possibly returning afterward. Reactive Network.

🗄️ Sei Rebuilds Storage Without Stopping The Chain

Sei’s 200,000-TPS target needs storage that can keep up with execution instead of making validators buy ever-larger disks. Eidos will replace EVM Merkle-tree state with FlatKV and a constant-time lattice hash, while LittDB handles write-once blocks and receipts and older history moves off nodes. Its first phase is already migrating state under v6.6 while Sei stays live, and a pruning pass that once took 8-18 minutes now finishes in about five. Sei.

NEWS IN THREE SENTENCES
Protocol News 🏦

🎓 Theta Gives 250 Japanese Students GPU Access

Chiba Institute of Technology is Theta EdgeCloud’s first academic partner in Japan, extending access to Professor Toru Takagi’s lab and a Web3 club with more than 250 students. That puts a real user count behind an infrastructure partnership, a surprisingly demanding standard around here. Students and researchers will use Theta’s 30,000-plus edge-node network for AI research, simulation, automated proving, and other projects requiring scalable GPU capacity. Theta Network.

🪠 LayerZero Starts Charging More

Starting September 1, Stargate OFT transfers will carry fees of up to 2 basis points, capped at $250 per transfer, with excess revenue directed toward ZRO buybacks. LayerZero Labs will also raise its minimum Executor fee to $0.25 per transaction, with selected routes potentially costing more later. Direct OFT integrations are unaffected, and neither change activates LayerZero’s separate protocol fee switch. LayerZero.

🛠️ DeXe Cut Twenty Seconds Down To One

DeXe’s main statistics query dropped from 20.2 seconds to 0.96 seconds, with repeat loads around 0.1 seconds once cached. Main-page requests fell from 140 to 60, the worst DAO-feed scroll stall moved from 247 milliseconds to zero, and indexing resumed for 128 BSC pools. DeXe.

OLD NEWS
Other Stuff That Happened Today, But A Long Ass Time Ago ⌛️

August 14

• 1040 - Macbeth kills King Duncan I in battle and takes Scotland’s throne. Shakespeare later adds witches.

• 1480 - Ottoman forces reportedly execute about 800 residents of Otranto who refuse to convert.

• 1848 - The enormous Oregon Territory is officially created by the United States.

• 1880 - Cologne Cathedral is completed after 632 years of construction.

• 1900 - An international army captures Beijing during the Boxer Rebellion.

• 1935 - Franklin Roosevelt signs the Social Security Act, creating America’s federal retirement system.

• 1936 - Roughly 20,000 people watch America’s final public execution.

• 1941 - Roosevelt and Churchill issue the Atlantic Charter, outlining their vision for the postwar world.

• 1945 - Japan accepts unconditional surrender, triggering massive celebrations and effectively ending World War II.

• 1947 - Pakistan becomes independent amid the extraordinarily bloody partition of British India.

• 1971 - The Stanford prison experiment begins. It becomes horrifying enough to stop after six days.

• 2018 - Genoa’s Morandi Bridge collapses during a rainstorm, killing 43 people.

Get In Touch 📬

Email me, Jonathan Morgan, feedback; I’d love to hear from you. 📧
Follow me on Stocktwits 🫂 And Sponsor this newsletter 😎 

Terms & Conditions 📝

Securities Disclaimer: STOCKTWITS IS NOT A TAX ADVISOR, BROKER, FINANCIAL ADVISOR OR INVESTMENT ADVISOR. THE SERVICE IS NOT INTENDED TO PROVIDE TAX, LEGAL, FINANCIAL OR INVESTMENT ADVICE, AND NOTHING ON THE SERVICE SHOULD BE CONSTRUED AS AN OFFER TO SELL, A SOLICITATION OF AN OFFER TO BUY, OR A RECOMMENDATION FOR ANY SECURITY. Trading in such securities can result in immediate and substantial losses of the capital invested. You should only invest risk capital, and not capital required for other purposes. You alone are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should also consult an attorney or tax professional regarding your specific legal or tax situation. The Content is to be used for informational and entertainment purposes only and the Service does not provide investment advice for any individual. Stocktwits, its affiliates and partners specifically disclaim any and all liability or loss arising out of any action taken in reliance on Content, including but not limited to market value or other loss on the sale or purchase of any company, property, product, service, security, instrument, or any other matter. You understand that an investment in any security is subject to a number of risks, and that discussions of any security published on the Service will not contain a list or description of relevant risk factors. In addition, please note that some of the stocks about which Content is published on the Service have a low market capitalization and/or insufficient public float. Such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information. Read the full terms & conditions here. 🔍

Author Disclosure: The author of this newsletter holds positions in AVAX, ADA, PUDGY, WLD, NEAR, INJ, LTC, LINK, ZEC, XLM, and FET. 📋