Large Holders Outflow
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IntoTheBlock classifies addresses based on their holdings the following way:
Whales: Addresses holding over 1% of a crypto-asset’s circulating supply.
Investors: Addresses holding between 0.1% and 1% of circulating supply.
Retail: Addresses with less than 0.1% of circulating supply.
In most cases, any holder with over 0.1% of circulating supply of a large cap crypto-asset holds a substantial amount of funds. Therefore, Large Holders Outflow tracks the funds going out of addresses belonging to either whales or investors.
Large Holders Outflow can be useful to spot moments of panic. Spikes in outflows can suggest two things: 1. Selling from these addresses and 2. Withdrawals from exchanges.
Large holders may be susceptible to selling assets during periods of high volatility to cover loans and avoid liquidations. On the other hand, since exchanges are some of the largest holders, large outflows can often be funds leaving exchanges. Such periods are shown in the red boxes above, where spikes in outflows coincided with points of panic and bottoms in the price of ETH.
Given the fact that several large holders see both inflows and outflows during the same day, it is worth keeping an eye on the netflows to monitor the net change in the holdings of these addresses.
