Definition ∞ Leverage reset complete describes a market condition where excessive leveraged positions, particularly in cryptocurrency derivatives, have been largely liquidated or closed out, leading to a significant reduction in overall market leverage. This event often follows a sharp price correction or a series of cascading liquidations, effectively cleansing the market of overextended speculative bets. A completed leverage reset can signal a healthier market structure, potentially setting the stage for more stable price movements or a new trend. It represents a deleveraging event.
Context ∞ News reports frequently highlight a “leverage reset complete” as a sign that a cryptocurrency market has purged its speculative excesses, often after periods of high volatility. This condition is typically viewed as a precursor to market stabilization or a recovery phase. Future developments involve improved risk management tools and regulatory oversight within derivatives exchanges to mitigate the severity and frequency of forced leverage resets, aiming for a more balanced market.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
