Money Flow Index (MFI) Indicator: How Does It Work?

The Money Flow Index (MFI) indicator is a technical tool that helps assess buying and selling pressure in the cryptocurrency market. Its main function is to analyze the flow of capital, identifying overbought or oversold conditions. MFI combines both price and volume, making it more informative than typical oscillators. Its values usually range from 0 to 100, with levels above 80 indicating overbought conditions and below 20 signaling oversold conditions. By using the MFI, traders can better understand when the market might reverse or continue a trend.