Definition ∞ Illiquid Supply Change refers to the net movement of digital assets into or out of wallets that exhibit long-term holding patterns and minimal spending history. An increase in illiquid supply indicates that more coins are being moved to cold storage or held by conviction investors, reducing the readily available supply on exchanges. Conversely, a decrease suggests assets are moving towards more active trading or potential selling. This metric is a key indicator of investor sentiment and supply scarcity.
Context ∞ Crypto news often reports on significant Illiquid Supply Changes as a bullish or bearish signal for market prices. A rising illiquid supply can indicate strong investor confidence and potential future price appreciation due to reduced selling pressure. Analysts closely monitor this metric to understand the underlying supply dynamics of major digital assets.
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