Understanding the Chaikin Money Flow Indicator

When you're trading crypto, knowing how to read market momentum can make all the difference. The Chaikin Money Flow (CMF) indicator is one of those tools that serious traders keep in their arsenal. It measures the relationship between an asset's price movement and its trading volume over a specific period.

Basically, it tells you whether money is flowing into or out of an asset. If CMF is positive, it signals accumulation—smart money is buying. When it dips negative, distribution is happening, suggesting large holders are selling. This gives you insight into whether a price move is backed by real buying or selling pressure.

For crypto traders, this matters because volume confirms conviction. You might see a price spike, but if volume is weak, the move might not hold. CMF helps you cut through the noise and spot genuine momentum shifts before they become obvious to everyone else. Whether you're analyzing Bitcoin, altcoins, or any trading pair, understanding how capital is actually moving through the market is crucial for consistent gains.