Definition ∞ Centralized exchange outflow signifies the movement of cryptocurrency from a centralized trading platform to external wallets. This action typically indicates that holders are withdrawing their digital assets, removing them from the exchange’s custody. Such movements can occur for various reasons, including self-custody preferences or deployment into decentralized finance applications. Analyzing these flows helps gauge participant sentiment and potential shifts in asset allocation.
Context ∞ A sustained centralized exchange outflow often suggests a reduction in immediate selling pressure on the platform and a potential increase in long-term holding intentions. This trend can signal a positive market outlook as participants opt to retain assets rather than trade them. Conversely, large inflows might precede increased selling activity or a desire for easier trading access.
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