Definition ∞ A Bitcoin leverage flush occurs when a rapid price movement liquidates a substantial amount of leveraged trading positions, forcing traders to close their positions. This event typically results in a cascade of further liquidations, amplifying price volatility. It serves to cleanse excessive speculation from the market, often leading to a healthier, more sustainable price discovery process. Such occurrences are common in highly volatile cryptocurrency markets.
Context ∞ Reports on Bitcoin’s price action frequently reference leverage flushes, particularly during sharp market corrections or sudden rallies. News often highlights the total value of liquidated positions as an indicator of market overheating or a return to more balanced trading conditions. Traders and analysts closely monitor leverage data to anticipate these events, as they can signal significant short-term market shifts and potential buying opportunities.
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