Bitcoin Price May Have Reached The Bottom
MFI, the money flow index, also known as the volume-weighted relative strength index, is used to identify buying and selling pressure and oscillates between zero to 100 and it is currently showing that Bitcoin may have bottomed in December. A rising MFI indicates an increase in buying pressure, while a falling MFI is considered a sign of increasing selling pressures, CoinDesk analyst Omkar Godbole reports.
A higher or increasing oscillation signals an increase in buying pressures while a lower or decreasing signal hints towards a decrease in selling pressures. In simpler words, the MFI is used to validate price trends of the market and make predictions for the near future.
In addition, the moving average convergence divergence (MACD) has become the latest charting indicator to signal bitcoin may soon see a trend reversal that could put an end to its months-long price decline.
If the Bitcoin indicator is correct, a good question is which price point will prove to be the ground-breaking resistance point, breaking which, will initiate a promising rally? Many analysts are saying the $4,190 point is the one to beat as it is the highest value of the inverted bullish signal generated by the MFI last week.
A convincing move above $4,190, if backed by a rise in the money flow, could yield a rally toward the psychological resistance of $5,000.
The bullish case presented by the MFI would weaken if the February low of $3,328 is breached with high volumes.