Asset Velocity quantifies the rate at which a digital asset changes hands over a specific period. It measures how frequently a cryptocurrency is traded or used in transactions, rather than being held. A higher velocity suggests active circulation, while a lower velocity indicates holding behavior. This metric provides insight into market liquidity and the utility of a digital asset.
Context
In cryptocurrency analysis, Asset Velocity is a key indicator for gauging market sentiment and asset utility. A rising velocity might suggest increased transactional use or a shift towards short-term trading, whereas a declining velocity often corresponds with accumulation or long-term holding strategies, influencing price stability and market capitalization discussions.
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