Exchange Outflow Metric

Definition ∞ An exchange outflow metric quantifies the amount of a specific digital asset being moved from centralized cryptocurrency exchanges to external wallets. This metric serves as an indicator of investor behavior, suggesting a preference for long-term holding or self-custody rather than immediate trading. Significant outflows can imply reduced selling pressure or accumulation by larger entities.
Context ∞ Analysts and news outlets frequently cite exchange outflow metrics to gauge market sentiment and predict potential price movements for cryptocurrencies. A consistent trend of increasing outflows often suggests growing investor confidence and a reduction in available supply on exchanges, which can be bullish. Conversely, inflows might signal impending selling activity, providing important context for market analysis.