Definition ∞ Bitcoin Supply Outflow refers to the movement of Bitcoin from long-term holding addresses or illiquid entities to exchanges or more active circulation. This action indicates a potential intent to sell or trade the asset, increasing the available supply on the market. It is often observed through on-chain analytics, providing insights into the behavior of significant holders. A sustained outflow can suggest a shift in market sentiment or a reaction to specific economic conditions.
Context ∞ Bitcoin Supply Outflow is a closely monitored metric in cryptocurrency news, as it frequently precedes periods of heightened selling pressure or market volatility. Analysts watch for patterns in these movements to gauge the conviction of long-term investors versus short-term traders. Significant outflows often prompt discussions about potential price corrections or the distribution phase of a market cycle.
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