Definition ∞ On-chain supply metrics are data points derived directly from a blockchain’s public ledger that provide insights into the distribution and movement of a cryptocurrency’s supply. These metrics include the number of active addresses, coin age distribution, exchange balances, and amounts held in smart contracts. They offer a transparent view of supply dynamics, helping analysts understand investor behavior and market sentiment. These data points are fundamental for evaluating an asset’s true scarcity and potential market pressure.
Context ∞ The analysis of on-chain supply metrics has become an indispensable tool for understanding the fundamental health and market outlook of digital assets. By providing an unfiltered view of network activity and asset distribution, these metrics offer insights that traditional market indicators cannot. Researchers and investors increasingly rely on this data to assess accumulation trends, potential selling pressure, and the overall conviction of asset holders.
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