Definition ∞ Bitcoin netflow measures the total amount of Bitcoin moving into or out of cryptocurrency exchanges. This metric represents the difference between Bitcoin inflows to and outflows from all centralized exchanges within a specific timeframe. A positive netflow indicates more Bitcoin entering exchanges than leaving, suggesting potential selling pressure. Conversely, a negative netflow implies more Bitcoin is being withdrawn, often interpreted as a holding signal by investors.
Context ∞ Bitcoin netflow serves as a significant on-chain indicator for market analysts assessing short-term supply dynamics and potential price movements. A sustained increase in netflow might signal an impending price correction, while a consistent decrease often precedes upward price action. Observing these movements helps interpret market sentiment and predict shifts in digital asset valuations.
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