The REKT token experienced a significant 70% price decline due to a liquidity cascade triggered by leveraged positions on the IMF platform built on Morpho Labs. The leverage has been largely wiped out, with the collateral held in the Morpho contract dropping from nearly 5% to 0.25% of the token supply. This event has "cleaned positioning," and the CEO of Rekt Drinks views it as an opportunity to rebuild and prove a point, suggesting potential for a rebound for those familiar with the project's history.