Definition ∞ Potential buying power refers to the aggregate amount of liquid capital, typically held in stablecoins or fiat, that market participants possess and could deploy to purchase digital assets. This metric indicates the latent demand within the cryptocurrency market. It represents the capacity for future investment or market support.
Context ∞ Analysts frequently examine potential buying power to forecast future market movements and identify periods of accumulation. A high level of this capital suggests a readiness among investors to enter or re-enter positions, potentially driving asset prices upward. This indicator provides insight into the overall market’s capacity for growth or recovery.
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