Chaikin Money Flow Bitcoin Trading Analysis & Money Flow Trading Signals

Developed by Marc Chaikin

This an oscillator which measure the Accumulation/distribution of money that is flowing into and out of bitcoin crypto.

The indicator is based on the fact that the nearer the closing bitcoin trading price is to the high of the bitcoin trading price, the more the accumulation of bitcoin crypto.

Also the nearer the closing bitcoin trading price is to the low of the bitcoin trading price, the more the distribution of bitcoin crypto.

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 Trading Analysis & How to Generate Trading Signals

Buy Trading Signal

A crossover of above zero signifies accumulation of bitcoin crypto. A value of above +10 is a buy/bullish signal. Values above +20 signify a strong upwards trending market.

Buy Crypto Trading Signal

Sell Trading Signal

A Zero line cross of below zero signifies distribution of bitcoin crypto. A value of below -10 is a short/sell crypto signal. Values below -20 signify a strong downward trending market.

Sell Crypto Trading Signal

Bitcoin Trend Line break with Chaikin’s money Flow

The money flow can be used to confirm bitcoin trend line breaks-out or support/resistance level breaks-out.

If bitcoin trading price breaks an upward bitcoin trend line, Bitcoin traders should then wait for a confirmation signal from the indicator values of below -10.

Bitcoin Trendline Break

If bitcoin trading price breaks an downward bitcoin trend line, Bitcoin traders should then wait for a confirmation signal from indicator values of above +10.

Bitcoin Trendline Break

Divergence Bitcoin Trading

A divergence between this indicator & bitcoin price often signals a pending reversal in market direction. However as with all divergences its best to wait for confirmation signals before trading the divergence.

A bullish divergence signal occurs when bitcoin trading price makes a lower low while the Chaikin Money Flow makes a higher low.

A bearish divergence signal occurs when bitcoin trading price makes a higher high while the Chaikin Money Flow makes a lower high.