Liquid Supply Increase

Definition ∞ 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.