Definition ∞ Supply shock deepening indicates an intensification of existing constraints on the available supply of a digital asset, leading to further reductions in liquidity. This trend suggests that the factors limiting supply are becoming more pronounced or that new restrictive elements are emerging. It typically exerts stronger upward pressure on price.
Context ∞ News often reports on supply shock deepening in the context of major cryptocurrency assets like Bitcoin, particularly after events such as halvings or significant institutional accumulation. This phenomenon is evidenced by metrics showing decreasing exchange reserves and increasing illiquid supply. A deepening supply shock signals a more pronounced scarcity, influencing market sentiment and price expectations.
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