Definition ∞ A derivatives reset refers to the periodic adjustment of funding rates or settlement prices for cryptocurrency derivatives contracts, particularly perpetual futures. This mechanism ensures the contract price remains anchored to the underlying spot price over time. It represents a scheduled recalibration within the derivatives market.
Context ∞ These derivatives resets significantly influence trader positions, market liquidity, and speculative activity, often contributing to price volatility in the digital asset market. Negative funding rates, for instance, indicate a bearish sentiment where short position holders compensate long position holders. News coverage often highlights these resets as indicators of market sentiment and potential price movements.
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