A recent trend in Kaspa’s on-chain data suggests that more of its circulating supply is becoming dormant. As of today, 62% of Kaspa’s supply has remained inactive for at least three months or more, up from 58% in mid-December. Even more notably, the supply that has been untouched for over a year has hit an all-time high, rising to 31.5% from 26% in December.
What Does This Mean?
The increasing percentage of inactive supply can be interpreted in multiple ways:
- Stronger Holding Sentiment
The rise in long-term holders suggests that a growing number of investors are choosing to hold onto their KAS rather than trade or sell. This often signals confidence in the asset’s future and can reduce immediate sell pressure. - Supply Squeeze Potential
With fewer coins actively moving, the available supply for trading decreases. If demand for KAS rises while a large portion of the supply remains locked in wallets, it could lead to upward price pressure over time. - Lack of Market Activity?
On the flip side, higher inactivity can also mean reduced engagement from traders and speculators. If Kaspa fails to attract fresh demand, the lower circulation might not necessarily translate to price gains but rather to a stagnant market.
The Bigger Picture
Kaspa’s rising long-term holding trend mirrors patterns seen in other successful blockchain projects. Assets like Bitcoin have historically seen similar accumulation phases before major price surges, as supply becomes increasingly constrained. However, external factors such as market sentiment, development progress, and exchange listings will play a significant role in determining whether Kaspa follows a similar path.
If this trend continues, the coming months could be crucial for KAS. Will it lead to a supply crunch and price appreciation, or does it indicate a cooling-off period in market activity? Time will tell.
