Risk Reset Complete describes a market phase where speculative positions and excessive leverage have largely been liquidated. This condition indicates that the market has undergone a significant correction, effectively purging much of the overextended risk-taking that accumulated during previous periods of exuberance. It suggests that the market is now operating with a healthier, more sustainable risk profile, as weak hands have been shaken out and asset valuations have adjusted. A “risk reset” often sets the stage for a more stable market environment, potentially preceding a new accumulation phase.
Context
The declaration of a “Risk Reset Complete” is a frequent topic in crypto market analysis, often signaling a potential end to a bear market or a major correction phase. A key discussion involves identifying the specific indicators that confirm this reset, such as a substantial reduction in open interest on derivatives exchanges or a broad deleveraging across the ecosystem. This concept helps investors assess whether the market has sufficiently cleansed itself of excessive speculation, preparing for a more balanced trajectory.
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