Liquid Market Supply refers to the portion of a cryptocurrency’s total supply that is readily available for trading on exchanges and easily convertible into other assets without significantly impacting its price. This metric indicates the amount of an asset that is actively circulating and accessible to market participants. It is a key indicator of market depth and ease of transaction.
Context
In the digital asset space, Liquid Market Supply is a critical factor for assessing an asset’s price stability and its susceptibility to large buy or sell orders. A low liquid supply can contribute to higher price volatility, as fewer assets are available to absorb trading pressure. A key discussion involves how staking, locking mechanisms, and decentralized finance protocols influence the overall liquid supply of various cryptocurrencies, affecting market dynamics.
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