Liquid supply increase refers to a rise in the amount of a cryptocurrency that is readily available for trading on exchanges. This metric indicates that more coins are being moved from long-term storage or less active wallets onto platforms where they can be bought or sold. An increase in liquid supply can signal a potential rise in selling pressure, as more assets become accessible to market participants. It reflects a shift in holder behavior, often from holding to trading.
Context
Crypto news often analyzes liquid supply increases as an indicator of potential market saturation or impending price volatility. The situation involves observing whether this increase is driven by profit-taking from long-term holders or by new market entrants depositing assets. Understanding this metric provides valuable context for assessing short-to-medium term market dynamics and potential price corrections.
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