Bitcoin exchange flows

What exchange balances measure

Every exchange keeps its customers' coins in wallets it controls, and those wallets are visible on chain. Add them up and you have the exchange balance: the amount of BTC that is one order away from being sold. It is not a count of sellers, it is a count of coins in the place where selling happens.

The balance moves for two reasons. Coins arrive when holders deposit to trade or to sell, and coins leave when buyers withdraw to cold storage, to a custodian, or into a protocol. The net flow on a given day is the difference, and it is the number this page is built around. A falling balance over months is the pattern that has accompanied every major Bitcoin rally; a rising one has preceded most of the deep drawdowns.

How to read it

• The level matters less than the direction: Exchanges hold a large fraction of the 21 million that will ever exist and always will. What carries information is whether the balance is being drawn down or built up, over weeks rather than days.
• Outflow is the usual bullish read, with a caveat: Coins leaving exchanges are being put somewhere less liquid, which removes near-term supply. But an exchange moving coins between its own wallets, or a custodian consolidating, produces the same print without any change in intent.
• Inflow spikes precede selling, not always the other way round: A large deposit is a coin positioned to sell. It may be sold over hours or sit for months. The spike is a warning, not a trade.
• One exchange at a time tells you who: The picker above the chart isolates a venue. A balance falling on one exchange and rising on another is a migration of customers, not a change in the market's position.
• Read it with price: Coins leaving on a rally are being bought and stored; coins leaving on a sell-off can be an exchange losing customers. The price line is drawn over both charts for that reason.

What it cannot tell you

• Coverage: only exchanges that can be identified on chain are labelled. Wallets that are not, and exchanges it does not track, are not in the total.
• Intent: A withdrawal to cold storage and a withdrawal to another exchange look the same on the day they happen. The second shows up as an inflow elsewhere; the first does not.
• Internal moves: Exchanges shuffle coins between hot and cold wallets. The labelling absorbs most of this, but a wallet relabelled after the fact can make a day's flow look larger than it was.
• Timing: The history is daily. A deposit and a withdrawal in the same day net to nothing here, however large each was.