A market condition where the price of an asset consolidates or moves sideways, leading to a reduction in leveraged long positions.
Long compression, often seen in derivative markets, occurs when an asset's price experiences a period of sideways movement or minor declines, forcing traders who have opened leveraged long positions to close them due to margin calls or risk management. This unwinding of long positions can contribute to further price stabilization or a gradual downtrend, as these positions are liquidated. It is a process that can precede significant price movements by clearing out speculative bullish leverage.