Supply Absorption Rate

Definition ∞ Supply Absorption Rate quantifies the speed at which the available supply of a cryptocurrency is being acquired by market participants. This metric indicates the level of demand relative to the existing or newly issued tokens. A high absorption rate suggests strong buying interest and potential for price appreciation. It reflects the market’s capacity to take on additional supply.
Context ∞ Supply Absorption Rate is a key metric frequently referenced in crypto news to assess market demand and potential price momentum. The situation often involves analyzing this rate in conjunction with new token issuance or significant unlocking events. A critical future development involves the increasing use of advanced on-chain analytics to provide more granular insights into which types of market participants are absorbing supply and their long-term intentions.