Exchange Outflow Velocity

Exchange Outflow Velocity measures the rate at which digital assets are being withdrawn from centralized exchanges to private wallets. A high velocity of outflows often suggests that investors are moving assets for long-term storage or to utilize them in decentralized finance protocols.

This trend is typically viewed as a bullish indicator, as it reduces the immediate sell-side liquidity available on exchanges. Analysts track this velocity to detect sudden shifts in market participant behavior, such as a rush to secure assets during periods of uncertainty.

It is a key metric for understanding the supply-demand balance of a token. Rapid changes in velocity can precede significant price volatility.