Definition ∞ A crypto market reset describes a significant and often sharp downturn across the digital asset market, leading to substantial price corrections. This event typically involves a broad depreciation of cryptocurrency values, liquidating over-leveraged positions. It often represents a recalibration of market expectations and asset valuations. Such periods can cleanse speculative excesses.
Context ∞ News coverage frequently attributes crypto market resets to various catalysts, including global economic shifts, regulatory crackdowns, or major protocol failures. These events can test the resilience of decentralized systems and influence investor behavior for extended periods. Understanding a market reset provides critical insight into the cyclical nature and inherent risks of digital asset investments.
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