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Market Reset

Definition

A market reset describes a significant and often rapid adjustment in asset prices, typically downwards, leading to a re-evaluation of market conditions. This event involves a broad repricing of assets, often triggered by macroeconomic shifts, regulatory changes, or a loss of investor confidence. It typically corrects speculative excesses, liquidates overleveraged positions, and establishes new, potentially more sustainable, valuation levels. Such periods can clear out weaker market participants and set the stage for subsequent growth based on more fundamental value propositions.