Definition ∞ Low leverage indicates a market condition where participants are utilizing minimal borrowed funds to amplify their investment positions in digital assets. This approach reduces the overall financial risk within the market, as sudden price movements are less likely to trigger widespread liquidations. It suggests a more stable and less speculative trading environment.
Context ∞ News reports often discuss low leverage as a sign of a healthier, more sustainable market, particularly after periods of excessive speculation. A reduction in market leverage can mitigate the severity of potential price corrections. This condition is generally viewed as a positive development, contributing to overall market stability.
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