Definition ∞ Supply Demand Imbalance describes a market condition where the quantity of a digital asset offered for sale does not align with the quantity that buyers wish to acquire at a given price. This disparity can lead to significant price movements, as excess demand drives prices up, and excess supply causes them to fall. It reflects a disequilibrium in market forces, often influenced by investor sentiment, news events, or macroeconomic factors. Such an imbalance is a primary driver of market volatility.
Context ∞ Crypto news often highlights Supply Demand Imbalances as a key factor influencing price action across various digital assets. Periods of high accumulation without corresponding selling pressure can lead to rapid price appreciation. Conversely, large liquidations or significant asset releases can create an oversupply, leading to price corrections. Understanding these dynamics is crucial for interpreting market trends.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
