Definition ∞ An on-chain sell signal is an indicator derived from blockchain data that suggests a heightened probability of a cryptocurrency’s price decline due to increased selling activity. These signals can stem from various metrics, such as a large influx of tokens to exchanges, a decrease in long-term holder positions, or a significant increase in transaction volume associated with profit-taking. Such signals assist market participants in anticipating potential downward price movements.
Context ∞ On-chain sell signals are regularly analyzed in crypto news and market reports to provide data-driven insights into potential market reversals or corrections. Analysts frequently monitor specific metrics, like exchange net flows or the Spent Output Profit Ratio, to identify periods of significant distribution. The current discourse focuses on refining these indicators to improve their predictive accuracy and help investors navigate market volatility.
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