Definition ∞ ETH Outflows refer to the movement of Ethereum tokens from cryptocurrency exchanges to external wallets. This metric often signals a shift in investor sentiment from short-term trading to longer-term holding. Substantial outflows can indicate a reduction in immediate selling pressure. They can also suggest an intent to stake or utilize ETH in decentralized finance protocols.
Context ∞ Analysts closely monitor ETH outflows as a key on-chain indicator for market sentiment and potential price movements. A sustained period of high outflows may precede periods of price appreciation, reflecting increased investor conviction. Conversely, significant inflows could suggest impending selling activity.
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