CoinDesk has reported, citing data from IntoTheBlock, that the amount of crypto-backed loans with liquidation prices within 5% of current prices has soared to $55 million, marking a two-year high. This surge in high-risk lending is raising concerns about a potential chain reaction of liquidations, which could lead to heightened market volatility. Experts believe that the increase in high-risk lending is driven by multiple factors, including: Investors seeking higher returns amid a challenging market environment Increased use of leverage by traders * A lack of clear regulatory guidelines for crypto lending The rise in high-risk lending has prompted warnings from analysts about the potential for a market downturn. If the prices of the underlying crypto assets continue to decline, it could trigger a wave of liquidations, forcing borrowers to sell their assets to cover their loans. This could further drive down prices and create a downward spiral. The current situation highlights the need for caution in the crypto lending market. Investors should carefully consider the risks involved and avoid excessive leverage. Regulators should also explore measures to mitigate the risks associated with high-risk lending practices.