Definition ∞ Exchange flow analysis involves examining the movement of cryptocurrency assets into and out of centralized exchanges. This analytical method helps infer investor sentiment and potential market trends. An increase in assets flowing into exchanges often suggests an intent to sell, while withdrawals from exchanges may indicate a preference for holding or transferring assets to decentralized platforms. This data provides valuable insights into supply and demand dynamics.
Context ∞ Exchange flow analysis is a widely used on-chain metric in crypto news to anticipate market movements and understand investor behavior. Reports frequently highlight significant inflows or outflows of specific assets to predict short-term price volatility or shifts in market structure. The utility of this analysis continues to grow as market participants seek deeper insights into the aggregate actions of traders and holders across various centralized platforms.
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