In Money Flow analysis, looking at Total Volume is not enough. The more important question is Where is the money being traded? The ratio between CEX and DEX acts as a compass for the market cycle.
๐ธ When CEX volume dwarfs DEX volume, the market is in a Risk off or Accumulation state. Capital here focuses on:
Majors BTC, ETH, SOL.
Futures and Margin for leverage trading.
Big funds buying OTC or quietly accumulating. This is the playground for cold logic and large capital.
๐ธ When DEX volume spikes and grabs significant market share from CEXs, the market shifts to Risk on, also known as Degen Mode. Capital here hunts for:
Low cap projects not yet listed on CEXs.
Meme Coins.
Yield Farming.
๐ History shows that when DEX Volume catches up to or flips CEX Volume, it is often a sign of peak Euphoria and an imminent local top.
๐น Monitor the DEX to CEX Ratio.
If the ratio is low <10% ๐ Focus on trading fundamental coins on CEXs; money is prioritizing safety.
If the ratio heats up >20% ๐ Rotate some capital to Web3 Wallets and hunt for Onchain opportunities, as speculative money is frantically looking for life changing gains.
Is the money sitting obediently in safe wallets, or roaming the DeFi jungle looking for prey?
News is for reference, not investment advice. Please read carefully before making a decision.
