Definition ∞ Exchange balance growth signifies an increase in the total quantity of a specific digital asset held on centralized cryptocurrency exchanges. This metric suggests that more assets are being moved onto exchanges, potentially indicating an intent to sell or trade. It often correlates with increased supply pressure on the market. Sustained growth can signal a shift in market participant behavior.
Context ∞ Current trends in exchange balance growth are closely observed for indications of impending market supply dynamics. A significant rise in exchange balances for a particular asset could suggest a forthcoming selling event, potentially impacting its price negatively. Conversely, a decline might point to assets being moved to cold storage, reducing immediate selling pressure.
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