Chaikin Money Flow Bitcoin Analysis & Money Flow Signals
Created by Marc Chaikins
This an oscillator which measure the Accumulation/distribution of money that is flowing into and out of bitcoin crypto.
This tool relies on a key idea. The closer Bitcoin's closing price gets to its daily high, the stronger the buying pressure in the crypto.
Furthermore, the closer the closing price of Bitcoin is situated relative to the low price achieved by Bitcoin, the greater the indication of Bitcoin distribution.
Chaikin Money Flow will be positive if bitcoin price consistently closes above the bar's midpoint with increasing volume.
However, if bitcoin price consistently closes below the bar's midpoint with increasing volume the indicator will be negative.
Bitcoin Analysis and How to Generate Trading Signals
Buy Signal
A zero line crossover moving above zero signals the accumulation of bitcoin cryptocurrency. A reading above +10 constitutes a valid buy or bullish signal, while values surpassing +20 indicate a market in a strong uptrend.
Buy Signal
Sell Trading Signal
A cross of the zero line beneath zero indicates a distribution phase for bitcoin cryptocurrency. A reading below -10 serves as a signal to short/sell crypto, while values under -20 indicate a strongly declining market trend.
Sell Signal
Bitcoin TrendLine break with Chaikin’s money Flow
Money flow helps confirm bitcoin trend breaks. It also spots support or resistance failures.
If the bitcoin price falls below an upward bitcoin trend line, people who trade Bitcoin should then wait for a confirming signal from the indicator values below -10.
BTCUSD Crypto Trend-Line Break
If the price of Bitcoin breaches a downward trend line, Bitcoin traders should await a confirmation signal from indicator values exceeding +10.
Bitcoin Currency Trend-Line Break
Divergence Bitcoin Trading
When this indicator and bitcoin's price start moving in different directions, that's usually a sign a reversal is coming. Still, don't jump in too soon. It's smarter to wait for a clear confirmation signal before trading on the divergence.
A bullish divergence happens when the bitcoin price reaches a lower point while the Chaikin Money Flow reaches a higher point.
A bearish divergence signal occurs when the bitcoin price creates a higher high while the Chaikin's Money Flow produces a lower high.
Explore Further Manuals & Training:
- When is BTCUSD Trade Market Least Active?
- MetaTrader 4 BTCUSD Charts Options Settings on Tools Menu
- How to Analyze Bar Charts
- How Do I Use BTC USD Trend Line Analysis in an Upward Bitcoin Trend?
- Downloading, Installing, and Logging into MT4 Platform
