Exchange netflow measures the total cryptocurrency moving into or out of centralized exchanges. This metric calculates the difference between the total amount of a specific digital asset deposited onto exchanges and the total amount withdrawn over a given period. A positive netflow indicates more assets are entering exchanges, potentially signaling an increase in selling pressure. Conversely, a negative netflow suggests assets are leaving exchanges, which can indicate accumulation or a preference for self-custody. It provides insight into short-term market sentiment and supply dynamics.
Context
Analysts in crypto news closely monitor exchange netflow as an on-chain indicator to gauge potential price movements. A sustained positive netflow often precedes price corrections, as increased supply on exchanges suggests readiness to sell. Conversely, significant outflows can indicate bullish sentiment, as holders remove assets from trading platforms for long-term storage or use in decentralized finance protocols. Understanding these movements helps assess the immediate supply-demand balance for various digital assets.
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