Market Supply Absorption describes a phenomenon where buying demand in a market effectively consumes a significant portion of available selling pressure without a substantial decline in price. This indicates that despite a continuous influx of assets being offered for sale, strong buyer interest prevents prices from falling sharply. It suggests a resilient demand base that is willing to acquire assets even as supply enters the market. This process often precedes upward price movements as supply becomes scarce.
Context
News reports frequently reference Market Supply Absorption when discussing the underlying strength of a digital asset’s price action. This metric helps explain why certain cryptocurrencies maintain or increase their value despite periods of high selling activity. Understanding supply absorption provides insight into the conviction of market participants and the potential for sustained price appreciation in the digital asset space.
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