Definition ∞ A Leveraged Risk Flush describes a rapid sequence of liquidations of leveraged trading positions within the cryptocurrency market, frequently initiated by significant price volatility. This event forces traders to close their positions, often leading to accelerated price movements in the direction of the initial trigger. It is a mechanism for deleveraging.
Context ∞ Leveraged risk flushes, also known as “long squeezes” or “short squeezes,” can dramatically amplify market downturns or upturns as cascading liquidations generate further price pressure. These events are closely monitored by traders for potential market bottoms or tops, indicating periods of extreme market stress and significant capital reallocation. They represent a cleansing of excess risk.
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