Definition ∞ The illiquid supply trend describes the observable pattern where an increasing proportion of a digital asset’s total supply is held in wallets that exhibit minimal transaction activity. These assets are typically held by long-term investors or entities with no immediate intention to sell. This trend suggests a reduction in the readily available supply on exchanges.
Context ∞ In cryptocurrency markets, the illiquid supply trend is often interpreted as a positive indicator for an asset’s future price trajectory. News analysis frequently references this metric to assess investor conviction and potential selling pressure. A sustained increase in illiquid supply can signal a maturing asset class and a growing base of committed holders, influencing market sentiment and investment strategies.
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