Illiquid supply increase refers to a rise in the amount of a cryptocurrency held in wallets that exhibit minimal to no spending activity over an extended period. This metric suggests that a growing portion of the asset’s total supply is being held for long-term investment or storage, rather than being actively traded. An increase in illiquid supply indicates a reduction in available selling pressure on exchanges. It often signals a strengthening belief among holders in the asset’s future value.
Context
Reports on illiquid supply increases are a key component of on-chain analysis, providing insight into investor behavior and market dynamics. News frequently highlights this trend as an indicator of accumulating sentiment, suggesting a potential for future price appreciation due to reduced circulating supply. This metric is closely watched by analysts to gauge the long-term conviction of market participants.
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