Supply Overhang refers to a market condition where there is an excess amount of an asset available for sale, exceeding the current buying demand. This imbalance creates downward pressure on prices as sellers compete to find buyers. It indicates that more participants wish to sell than to acquire, leading to a surplus of available units. A persistent supply overhang can hinder price recovery.
Context
In cryptocurrency markets, a Supply Overhang is often discussed when large volumes of digital assets are transferred to exchanges, indicating an intent to sell. News reports may link this condition to events like unlock schedules for previously restricted tokens, large miner distributions, or significant institutional liquidations. This phenomenon can impede upward price movements and prolong periods of consolidation or decline.
Seasoned investors are consistently selling over 22K BTC daily, creating a supply overhang that signals demand exhaustion and a need for a longer price reset.
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