Trust & Intelligence · 60-second explainer

How We Detect Exchange vs Private Wallets

On-chain analysis · 60 seconds

How We Detect Exchange vs Private Wallets: key takeaways

Exchange wallets show predictable deposit/withdrawal patterns
Private wallets hold coins long-term with irregular movement
Transaction size and frequency reveal wallet behavior clues
Cluster analysis links addresses to identify true ownership

How We Detect Exchange vs Private Wallets — full explainer

Why do some Bitcoin holders disappear for years while others trade constantly? That difference is how we spot exchanges versus private wallets. Exchange wallets follow a rhythm—deposits from users, then withdrawals to traders. Private wallets? They're scattered, irregular, sometimes dormant for months. We look at transaction patterns: exchanges move smaller amounts frequently, while whales accumulate and hold. We also cluster addresses together using blockchain forensics to see if multiple wallets belong to the same person or institution. By studying timing, size, and frequency, we unmask who's really moving the market.

Originally posted on YouTube: https://youtu.be/hkynzwJ0GSg

Glossary terms used in this explainer

@ 0:07

Whale Cluster

Multi-input common-input-ownership clustering: if 2 addresses sign the same TX as inputs, they're controlled by the same key. Builds whale-cluster maps (~7M clusters in our DB).

@ 0:28

Whale

Transactions of 500 BTC or larger but below the Mega Whale threshold (1,000 BTC). Common for large traders, OTC desks, exchange operations, and treasury management. Most actionable tier for daily flow analysis.

@ 0:36

Spot

The market for immediate delivery of an asset at the current price. Opposite of "futures" (where you trade a contract for future delivery) or "perpetuals" (perpetual-futures with funding rates). When we say "BTC price" without qualifier we mean spot.

@ 0:39

Alpha

Strategy returns minus benchmark returns (e.g. SPY for stocks, BTC HODL for crypto). Positive alpha = strategy beat the passive baseline. Negative = holding would have done better. Most active strategies show 0 or negative alpha after fees.