Definition ∞ Futures deleverage describes a situation where market participants reduce their leveraged positions in cryptocurrency futures contracts. This typically occurs during periods of high volatility or significant price corrections, as traders close positions to mitigate further losses or avoid liquidation. The process involves selling assets or adding collateral to reduce exposure. It can amplify market downturns.
Context ∞ News regarding futures deleverage often accompanies sharp price declines in the crypto market, as large-scale liquidations can trigger a cascade effect. Analysts frequently monitor deleveraging trends to assess market stability and potential for further price movements. This concept is important for understanding market dynamics, especially in derivatives trading, and its impact on spot prices of digital assets.
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