Definition ∞ Net exchange flow represents the difference between the total amount of a specific cryptocurrency moving into and out of centralized exchanges over a given period. A positive net flow indicates more assets are entering exchanges, potentially signaling an intent to sell. A negative net flow suggests assets are being withdrawn, possibly for long-term holding or use in decentralized finance. This metric serves as a market sentiment indicator.
Context ∞ Analysts and crypto news outlets closely monitor net exchange flow data to assess short-term market sentiment and potential price movements. Significant shifts can indicate upcoming volatility or a change in investor behavior. Understanding these flows provides valuable insight into the collective actions of market participants, influencing trading strategies and market forecasts.
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