Definition ∞ Exchange Net Flow represents the difference between cryptocurrency inflows and outflows from centralized exchanges over a specific timeframe. A positive net flow indicates more assets are moving onto exchanges, often suggesting increased selling pressure or a desire to trade. Conversely, a negative net flow means more assets are leaving exchanges, typically implying a preference for long-term holding or use in decentralized applications. This metric provides a snapshot of aggregate market sentiment.
Context ∞ Crypto news and on-chain analysis platforms regularly report on exchange net flow as a crucial indicator of market direction and investor behavior. Significant positive flows can signal potential price corrections, while sustained negative flows often precede periods of price appreciation due to reduced liquid supply. Understanding exchange net flow helps market participants gauge the immediate supply and demand dynamics for various digital assets.
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