What this chart shows
Every time a bitcoin moves onto an address Coin Metrics identifies as belonging to a known exchange, it counts as inflow; every time one moves off, it counts as outflow. Netting the two and smoothing over 30 days produces a read on which direction coins are structurally moving.
A negative reading means more coins left exchanges than arrived — consistent with holders moving coins into self-custody rather than keeping them liquid and ready to sell. A positive reading means the opposite.
How to read it
Sustained negative readings (net outflow) have historically coincided with accumulation phases, since coins leaving exchanges are, by construction, no longer sitting in a liquid, sellable position. Sustained positive readings (net inflow) mean more supply is moving into position to be sold, which has historically preceded or accompanied distribution phases. Treat the trend over weeks, not any single day, as the signal.
Limitations
Exchange identification is inherently incomplete. Coin Metrics tags known exchange addresses from public information and heuristics, but new exchange wallets, cold storage rotations, and unlabeled addresses all introduce noise and can misclassify large transfers.
An inflow doesn't guarantee a sale, and an outflow doesn't guarantee long-term holding — it could just as easily be a withdrawal to a hardware wallet for a week, or an internal transfer between an exchange's own hot and cold wallets, which this metric cannot distinguish from genuine customer activity.
Custodial products (ETF creation/redemption, institutional OTC desks) increasingly move large amounts of Bitcoin off the tracked exchange rails entirely, the same off-chain-custody caveat that applies to SOPR and Realized Price.