Definition ∞ Deleveraging complete refers to a market state where excessive debt and speculative positions have been substantially reduced or eliminated from the system. This process typically follows a period of significant price decline, forcing liquidations and reducing overall market risk. It indicates that the market has purged a large portion of its unsustainable leverage. This condition often precedes a stabilization or recovery phase.
Context ∞ Market commentators frequently declare “deleveraging complete” during or after severe cryptocurrency market corrections, signaling a potential bottom. This assessment suggests that the forced selling pressure from over-leveraged positions has largely subsided. Observing this completion helps in identifying periods where market dynamics might shift from liquidation-driven declines to more fundamental price discovery.
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