Definition ∞ Smart money activity refers to investment actions undertaken by experienced, institutional, or well-informed market participants. This activity often involves large capital movements and can precede significant price changes. Observing smart money flows can provide indications of future market direction. It contrasts with the trading patterns of retail investors.
Context ∞ In cryptocurrency markets, analysts frequently discuss smart money activity to assess potential turning points after market corrections. Tracking large transactions, movements from institutional wallets, or accumulation by long-term holders often serves as a proxy for this activity. News reports frequently highlight patterns suggesting institutional involvement, examining their potential influence on digital asset valuations and market sentiment.
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