A structural unwind refers to the systematic liquidation or reduction of large, often leveraged, positions across a market or asset class. This process is typically driven by fundamental changes in market conditions, regulatory pressures, or a broad loss of confidence. Unlike a sudden crash, a structural unwind can occur over an extended period. It leads to sustained downward price pressure.
Context
Cryptocurrency news may discuss a structural unwind during prolonged bear markets or after significant macroeconomic shifts affecting investor risk appetite. Reports might attribute sustained price declines to the systematic closing of overextended positions by institutional or large retail investors. Understanding this concept helps interpret extended periods of market contraction and the underlying forces driving them.
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