Definition ∞ Speculative leverage cleared signifies a market condition where an excessive amount of borrowed funds used for speculative trading has been liquidated or voluntarily closed. This event typically follows a sharp price decline, forcing over-leveraged positions to unwind. It represents a purging of unsustainable risk from the market, reducing the potential for further cascading liquidations. This clearing often sets the stage for a more stable market environment.
Context ∞ Market analysts frequently point to “speculative leverage cleared” in crypto news when discussing the aftermath of significant market corrections. This indicates that a major source of downward pressure, often from forced selling, has dissipated. Identifying this phase helps interpret whether the market has reset and is prepared for more organic price movements.
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