IntoTheBlock uses machine learning algorithms to identify centralized exchanges’ deposit and withdrawal addresses. Through this process, IntoTheBlock measures the total activity flowing in and out of centralized exchanges. The result is the Total Flows indicator which is measured the following way:
Total Flows = Inflow Volume + Outflow Volume
💡 How can I use it?
Total Flows for Bitcoin
The Total Flows indicator provides indication of instances of high centralized exchange activity. So when does centralized exchange activity tend to increase?
In general, we see spikes in Total Flows when there are either local tops/bottoms (shown in blue), but also when there are price breakouts (orange). Conversely, Total Flows tend to drop during periods of accumulation or consolidation as highlighted in yellow.
While Total Flows can be indicative of market positioning, there are also natural flows managed by centralized exchanges which can lead to sudden outliers that may not necessarily be predictive of price changes.
