Exchange Supply Ratio

The Exchange Supply Ratio is the proportion of an asset's total circulating supply that is currently held on centralized exchanges. This ratio serves as a barometer for the market's readiness to sell.

A high ratio suggests that a large portion of the supply is easily accessible for trading, which may heighten the risk of sell-side pressure. Conversely, a low ratio indicates that the majority of the supply is held in private wallets, suggesting a more stable supply environment.

Traders use this ratio to assess the potential for supply shocks. It is a quantitative measure that helps contextualize exchange inflow and outflow data.

By tracking this ratio over time, one can observe shifts in the market's overall liquidity profile and long-term holding behavior.