Derivatives Outflow

Definition ∞ Derivatives outflow represents the net movement of capital away from derivative products related to digital assets. This indicates a reduction in speculative positions or hedging activities within the futures, options, or perpetual swap markets. It suggests a decrease in participant interest or a shift in market sentiment regarding these complex financial instruments.
Context ∞ Derivatives outflow is often reported in crypto news as a signal of changing market conditions, potentially indicating reduced leverage or a move towards more conservative investment strategies. A consistent outflow may precede or coincide with a period of decreased volatility or price corrections in the underlying digital assets. This metric offers insight into the overall health and speculative temperature of the derivatives market.