Definition ∞ Crypto netflow represents the aggregated movement of cryptocurrency tokens into or out of centralized exchanges over a specific period. A positive netflow indicates more tokens are deposited than withdrawn, potentially signaling intent to sell. Conversely, a negative netflow suggests more tokens are withdrawn than deposited, which can indicate a desire to hold or transfer assets to cold storage. This metric provides insight into aggregate market sentiment and potential selling or buying pressure.
Context ∞ Crypto netflow is a widely utilized on-chain metric for assessing short-term market dynamics and investor behavior in digital asset markets. Analysts frequently reference netflow data to predict potential price movements, with large inflows often interpreted as a bearish signal and outflows as bullish. A key debate centers on the reliability of netflow as a standalone indicator, given that deposits and withdrawals can serve multiple purposes beyond immediate trading intent.
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