Exchange Supply Proportion

Definition ∞ Exchange supply proportion refers to the percentage of a digital asset’s total circulating supply that is held on centralized cryptocurrency exchanges. This metric provides insight into the immediate liquidity and potential selling pressure for an asset. A higher proportion suggests greater availability for trading and potential downward price pressure. It reflects investor readiness to transact.
Context ∞ The current exchange supply proportion for various digital assets is a critical factor in evaluating their market dynamics. A decreasing proportion often signals that investors are moving assets off exchanges for long-term holding, reducing immediate selling pressure. Conversely, an increasing proportion can indicate an impending supply increase on the market.