Meaning of Money Flow and Price

Money flow and coin price are two important factors in cryptocurrency analysis and trading. Understanding and applying them properly can help you make more accurate investment decisions. Here is an explanation and how to apply them:

1. Meaning of Money Flow in Cryptocurrency

Money Flow is the amount of capital flowing into or out of the market or a specific coin. It shows investor interest and market sentiment.

Important signals from money flow:

High money inflow:

When there is a lot of money flowing into a coin, its price usually tends to increase because demand is higher than supply. This can signal that large investors (whales) are accumulating.

High money outflow:

When there is a lot of money flowing out, the coin price can decrease because supply increases and demand decreases. This shows profit-taking or fear in the market.

How to Measure Money Flow:

Money Flow Index (MFI): Combines trading volume and price action to determine the strength of money flow.

MFI > 80: Overbought → Price may fall.

MFI <span Oversold → Price may rise.

2. Coin Price

Coin price reflects the balance between supply and demand in the market. Prices are often affected by:

News: Announcements about cooperation, regulations, or major events.

Trading volume: High volume indicates high interest.

Technical analysis: Support and resistance levels.

Market psychology: Greed or fear can push prices up or down.

Read part 3 in the comments section./