Exchange Inflow
Exchange inflow is the amount of a coin deposited into known exchange addresses over a given period. Because coins are usually moved to an exchange in order to trade them, rising inflows are often watched as a possible sign of selling interest.
How exchange inflow is measured
Exchanges control many blockchain addresses: deposit addresses for each customer, hot wallets and cold wallets. Analytics firms identify these addresses using known patterns, public disclosures and transaction clustering, and then sum the coins arriving at them from outside the exchange.
Transfers between an exchange's own wallets are normally filtered out, since they are internal housekeeping rather than new deposits. How well this is done depends on the provider.
Why analysts watch it
To sell coins held in self-custody on a centralized exchange, you first have to deposit them. So a sudden surge in inflows, especially from large holders or long-dormant wallets, can mean that more supply might soon hit the order books.
Inflows of stablecoins are read differently: they can indicate money arriving that could be used to buy other assets.
An example
Say a coin normally sees about 5,000 units deposited to exchanges per day. One day, 40,000 arrive, much of it from a handful of wallets that had not moved in years. Analysts would flag this as unusual. Over the next days the coin might see heavy selling, or nothing at all if the coins were deposited to be used as collateral, lent out, or moved into custody.
Limits and misreadings
A deposit is not a sale. Coins can be sent to an exchange for many reasons, and the metric cannot see what happens afterwards inside the exchange's books. It also depends on how complete the provider's list of exchange addresses is; new or less known exchanges may be missing.
Exchange inflow works best compared with its own history and alongside outflows and price, not as a stand-alone trading signal.
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Frequently asked questions
Are high exchange inflows bearish?
They are often interpreted that way, because deposited coins can be sold. But deposits may also be used for collateral, lending or custody, so they are not proof of selling.
How do analysts know which addresses belong to exchanges?
Through clustering techniques, public disclosures such as proof-of-reserves lists, and observed deposit patterns. The labels are estimates and can be incomplete.
What is the difference between exchange inflow and netflow?
Inflow counts only coins arriving at exchanges. Netflow subtracts outflows from inflows to show whether exchange balances rose or fell overall.
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