Crypto Leverage Continues to Fall, But at a Gradual Pace

Crypto market deleveraging has continued for three consecutive quarters, but Galaxy Research says it differs from the sudden collapse seen in the 2022 bear market.

The blockchain media outlet CoinPost reported that Galaxy Research's report titled 'State of Crypto Leverage Q2 2026' said leverage is continuing to shrink across the market, but at a relatively gradual pace.

The key is the pace of deleveraging. Galaxy Research noted that the declines over the past three quarters were 10 percent, 5 percent and 17 percent, which is a significant decline from the record high of $78.69 billion in the third quarter of 2025, but not as sharp as the collapse seen in 2022.

Total outstanding loans across the market were tallied at $56.16 billion, down 16.78 percent from the previous quarter. Balances on decentralized finance (DeFi) lending applications fell 27.61 percent over the period to $20.43 billion, extending declines for a third straight quarter.

Galaxy Research said this structure shows the market is different from the one-way collapse phase of 2022, and that the current market is closer to a phase of restructuring by reducing risk exposure than a shock phase of rapidly shedding leverage.