Active Supply

Definition ∞ Active Supply refers to the quantity of a cryptocurrency that has been transacted or moved within a specific timeframe. This metric indicates the level of current engagement and utility of a digital asset on its native blockchain. It provides insight into market dynamics, reflecting whether tokens are being actively traded, used in decentralized applications, or otherwise circulating among participants. A higher active supply often suggests increased network activity and potential market interest.
Context ∞ Discussions around active supply frequently surface in market analysis reports, especially when evaluating a digital asset’s short-term price movements or network health. Observing shifts in active supply can signal changes in investor sentiment or the adoption rate of a protocol. Analysts often compare active supply against total supply to gauge a token’s liquidity and potential for price volatility, offering critical context for understanding news about market trends.