Dormant Supply

Definition ∞ Dormant supply refers to the quantity of a specific digital asset that has remained unspent or unmoved from its originating address for a prolonged, predefined period. This metric provides insight into the long-term holding behavior of asset owners, often indicating conviction or passive accumulation. Analyzing dormant supply can help gauge potential selling pressure or the likelihood of future market activity. A significant increase in dormant supply may suggest a reduction in circulating supply available for immediate trade.
Context ∞ Discussions around dormant supply frequently focus on its implications for price discovery and network health, with particular attention paid to older, untouched holdings of major cryptocurrencies. Analysts often debate whether this inactivity signifies a lack of interest or a strategic long-term holding strategy by early adopters and large stakeholders. The potential for a large volume of dormant supply to re-enter the market is a constant consideration when assessing market dynamics and potential volatility.