Definition ∞ Liquid Coin Scarcity describes a market condition where a limited quantity of a particular digital asset is readily available for immediate trading on exchanges. This scarcity means that only a small portion of the total supply is actively circulating and accessible for purchase. It can result from assets being held long-term, staked, or locked in protocols.
Context ∞ News reports often highlight liquid coin scarcity as a significant factor contributing to rapid price movements in the cryptocurrency market. When available supply is low, even moderate buying pressure can cause substantial price increases. This condition is closely monitored by analysts to assess market supply dynamics and predict potential volatility.
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