Definition ∞ Average Netflow represents the mean movement of a digital asset into or out of a specific set of wallets or exchanges over a defined period. This metric helps to assess the collective sentiment of market participants. A positive netflow indicates an increase in assets held within these entities, while a negative netflow suggests a decrease. It offers insight into accumulation or distribution trends among various market segments.
Context ∞ Understanding Average Netflow is significant for analyzing market dynamics in digital assets, as it can signal potential price movements. A sustained positive netflow to exchanges, for example, might suggest increased selling pressure, whereas a negative netflow could indicate accumulation by long-term holders. Analysts frequently monitor this metric to discern shifts in investor behavior and broader market positioning.
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