Definition ∞ The Exchange Balance Trend tracks the net change in the total amount of a specific cryptocurrency held on centralized exchanges over time. This indicator helps assess market sentiment regarding potential buying or selling pressure. A declining balance suggests assets are moving off exchanges, possibly for long-term holding or decentralized finance usage. An increasing balance often signals an intent to sell.
Context ∞ Observing exchange balance trends provides valuable insight into the collective actions of market participants and their outlook on a digital asset. Significant shifts in these balances are frequently reported in crypto news as they can precede notable price movements. Understanding this trend is important for anticipating market liquidity and investor behavior.
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