Supply side pressure in cryptocurrency markets refers to the downward force on prices caused by an abundance of available digital assets for sale, exceeding current buying interest. This condition arises when sellers are numerous or hold large quantities, leading to an increased supply on exchanges. It typically results in price declines as sellers compete to offload their holdings.
Context
Factors contributing to supply side pressure include profit-taking by long-term holders, negative news, regulatory uncertainty, or a general shift in market sentiment towards risk aversion. When supply side pressure intensifies, it can trigger significant price corrections or extend downtrends. Monitoring metrics like exchange inflows can help identify periods of increased supply entering the market.
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