TL;DRNetflow = coins flowing into exchange-labeled addresses minus coins flowing out, over a given window. Sustained net outflows are commonly read as accumulation (coins moving to self-custody or cold storage); sustained net inflows are commonly read as building sell pressure. Both readings assume the reason coins moved, which the data itself can't confirm.
What's actually being measured
Exchange netflow relies on address-labeling: known exchange deposit and withdrawal addresses are tracked, and the daily net difference (inflow minus outflow) is reported in native units of bitcoin.
Netflow = Flow Into Exchange Addresses − Flow Out of Exchange Addresses
This is a Tier 1 metric in the sense that the flows themselves are measured directly from on-chain transactions to labeled addresses — not modeled or estimated. What can't be directly measured is why the coins moved; that part can only be inferred.
The common (and incomplete) reading
The standard narrative: net outflows suggest coins are leaving exchanges for self-custody or cold storage, consistent with holders who plan to hold, not sell — read as bullish. Net inflows suggest coins are arriving at exchanges, consistent with holders positioning to sell — read as bearish. This reading has some real basis: exchanges are where spot selling actually happens, so coins have to arrive there first.
Where the reading breaks down
Address labeling is inherently incomplete and occasionally wrong — exchanges add new deposit addresses, use internal wallet-shuffling that looks like external flow, and some large "exchange" flows are actually custodial rebalancing, OTC settlement, or cold-to-hot wallet transfers within the same exchange — not retail deposits ahead of a sale. A single large one-time transfer can swing the daily number dramatically without reflecting any change in aggregate market sentiment at all. Netflow is best read as a directional, noisy signal over weeks, not a precise day-by-day sentiment gauge.
Netflow's actual 7-day and 30-day trend, pulled live from Coin Metrics exchange-flow data, sits on the Exchange Netflow chart.
FAQ
Does a netflow spike always mean someone is about to sell?
No. A single large inflow can be an exchange consolidating its own wallets, an OTC desk settling a trade, or a custodian moving cold storage — none of which necessarily precede retail selling. That's why this site treats netflow as a noisy, directional signal, never a precise one.
Why look at netflow trend instead of single-day values?
Address-labeling noise and one-off internal transfers can dominate a single day's reading. A multi-week net trend filters out much of that noise and better reflects a genuine shift in aggregate behavior.
How is netflow different from exchange reserves?
Netflow is the daily flow (a rate); exchange reserves is the cumulative balance sitting on exchanges right now (a stock). Reserves is netflow integrated over the platform's entire history, which is why the two pages on this site are read together.
Why does the live chart report netflow in BTC instead of dollars?
Coin Metrics publishes exchange flow in native units (bitcoin), not a dollar-converted figure. Reporting the raw native number avoids adding a second layer of interpretation on top of an already-inferential metric — a fixed number of coins moving means the same thing regardless of what price does that day.