⚡What Is a Supply Shock in Crypto?
A supply shock happens when the available supply of a token suddenly changes, while demand stays the same (or increases). This imbalance often leads to sharp price movement.
📉 Negative supply shock :
When a large number of tokens enter circulation at once (token unlocks, emissions, sell pressure), prices may drop due to oversupply.
📈 Positive supply shock :
When supply is suddenly reduced (burns, lockups, exchange outflows), scarcity increases — often pushing prices higher.
🧠 Why it matters :
Explains sudden volatility
Helps traders prepare for unlocks, burns, or vesting events
Key concept in tokenomics and market cycles
🔍 In Short :
Supply shock = a sudden change in token supply that disrupts price balance.