Definition ∞ An on-chain stress signal is an indicator derived from blockchain data that suggests underlying weakness or potential instability within the cryptocurrency market or a specific protocol. These signals can include increased selling by long-term holders, significant outflows from exchanges, or a rise in dormant coin movement. Such indicators help analysts assess the health and sentiment of the network.
Context ∞ Analysts frequently monitor on-chain stress signals to anticipate significant market movements, particularly during periods of high volatility or uncertainty. The interpretation of these signals often involves assessing their correlation with macroeconomic factors and broader market sentiment to predict future price action.
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