Definition ∞ ETH exchange supply refers to the total quantity of Ethereum tokens held in cryptocurrency exchange wallets. This metric indicates the amount of ETH readily available for trading by market participants. A higher exchange supply can suggest increased selling pressure, while a decreasing supply might indicate holders are moving assets to cold storage or for use in decentralized finance applications. It serves as a key indicator of potential market movements.
Context ∞ News analyses frequently reference ETH exchange supply to gauge short-term market sentiment and predict price volatility. A notable decrease in exchange holdings often precedes price increases, suggesting accumulation. Conversely, a surge in exchange supply can signal impending sell-offs. Investors monitor this metric closely for insights into broader market trends and trader intentions regarding Ethereum.
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