Short answer
If a handful of wallets hold most of the supply, any one of them can crash the price by selling. The more spread out the holders, the less one exit can hurt you.
Holder concentration is usually shown as the share of supply held by the top 10 wallets, excluding pools and burn addresses. A high number means a small group controls the market.
Those wallets are often insiders, the developer, or one person spread across many addresses. When they sell, the pool has to absorb it, and thin pools can't absorb much. DYOR flags tokens where the top 10 hold more than 40%.
Concentration changes over time, so a token that looked fine at launch can become top-heavy, or the reverse. Check it close to when you buy.
See the checks for yourself
18+ only. Self-custodial: you keep your keys. 0.5% per trade, no minimum. Memecoins can go to zero.