Definition ∞ Top-heavy supply describes a market condition where a significant portion of an asset’s total supply is held by a small number of addresses. This concentration indicates that a few large holders possess substantial influence over the asset’s price dynamics, as their selling activity could drastically impact market liquidity. Such a distribution can lead to increased price volatility and raises concerns about market manipulation. It often signals potential selling pressure at higher valuations.
Context ∞ Top-heavy supply is a closely monitored on-chain metric, frequently cited in crypto news to assess market risk and decentralization levels. Current discussions often focus on how this supply distribution affects price stability and investor confidence. A critical future development involves the analysis of long-term holding patterns among these large addresses, providing better context for their potential market impact.
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