Exchange Netflow Drop

Definition ∞ An exchange netflow drop indicates a reduction in the net amount of cryptocurrency moving onto centralized exchanges. This metric is calculated by subtracting outflows from inflows over a specific period. A significant drop suggests that fewer assets are being sent to exchanges for potential sale. This trend often implies reduced selling pressure and a preference for holding assets off-exchange.
Context ∞ Crypto news often references exchange netflow drops as a signal of shifting market sentiment among digital asset holders. A sustained netflow drop is frequently interpreted as a bullish indicator, suggesting that participants are less inclined to sell their holdings. This on-chain data point provides valuable context for understanding supply dynamics and anticipating potential price movements. It helps analysts assess market liquidity and investor intentions.