Confirmation of the $ 3,000 floor price for Bitcoin by the Money Flow Index

Abstract

Based on a technical indicator that utilizes both bitcoin prices and trading volume, the bitcoin price has reached its bottom in December.

6 12 19

Based on a technical indicator that utilizes both bitcoin prices and trading volume, the bitcoin price has reached its bottom in December.

The MFI, which is also known as the index of relative volumetric weights, is used to identify the pressure of sales and purchases. The index, which is characterized by an oscillation between numbers 0 and 100, is upside-high, indicating an increase in purchasing pressure and, in a downside, reflecting increased sales pressures.

It should also be noted that this index is used to confirm the price trends. However, most of the time, we have witnessed a divergence of trends in the market.

To better understand the issue, Bitcoin eliminated hopes by breaking support for $ 6,000 for a long-term uptrend and bullish pattern on Nov. 14 and Nov 15 until it eventually fell $ 3.122 on December 15th. The MFI's 14-week index fell from 43 units in mid-November, confirming a rise in sales pressures in prices.

However, the index was closed at a higher floor of 22 units, while Bitcoin lowered the floor to close a positive divergence.

This was a powerful indication that the upside trend was expected to change in the near future. In order to confirm this, Bitcoin's argument first recorded its monthly green curtail in February after months of continuous downtrend with a 10% increase from the beginning of the month to increase the MFI index from 25 to 44 units.

Of course, indicators such as McDonald's (MACD) and the intersection formed between the average moving average of 50 and 100 in the weekly timer represent a long-term downtrend. But the bug in these tools is not considering the volume of transactions. In this regard, the MFI indicator can be used as a more reliable tool.

Considering this and a number of other indicators that show a bullish return trend, the likely scenario for the bitcoin price rise is likely a year earlier, before halving its network reward, more likely than before.

At the time of writing, Bitcoin trades at $ 3,784.



As illustrated in the picture, despite the fall of the bitcoin to $ 3,100, the MFI index has shaped a bullish divergence in mid-December. Further, the index made a higher floor at 25 units in late January and is currently moving toward the canal ceiling.

Breaking up the channel will confirm the MFI bullion divergence scenario and strengthen it.

But when it comes to the bitcoin price, the $ 4,190 mark is raised as a resistance, which could raise Bitcoin up to $ 5,000 in psychological resistance if accompanied by a cash flow indicator.

The bullish scenario given by the money flow indicator will lose its credibility if the lowest price formed in February is $ 3,328 at high rates.

Source: coindesk

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