Informed Trading Flow
Informed trading flow represents the volume of trades executed by participants who possess non-public or superior analytical information regarding future price movements. These traders utilize advanced models, insider knowledge, or sophisticated data analysis to anticipate market direction.
In the crypto space, this flow is often observed through whale movements or large, directional options positioning that precedes significant news events. Market makers track this flow closely to adjust their delta hedging strategies, as it serves as a leading indicator of volatility.
When informed flow dominates, it suggests that the market is rapidly incorporating new information, leading to quick price adjustments. Monitoring this flow helps participants understand whether current price action is driven by retail sentiment or institutional conviction.