Fast Track Trading Course | Understand how the Chaikin Money Flow indicator operates in the 2025 crypto market

Latest developments in 2025

The Chaikin Money Flow (CMF) indicator will continue to evolve into a key tool for cryptocurrency traders in 2025. Key developments include:

• Advanced Formula Integration The trading platform now automatically calculates the complete formula:
  Capital flow multiplier × Transaction volume = Capital flow

• Improved Cross-Analysis The concept of “Bull/Bear Cross” has gained widespread attention, with tracking the CMF crossing above or below the zero line serving as an important trading signal.

• Enhanced visual interface TradingView and other platforms have introduced a color gradient CMF display, making trend strength immediately recognizable.

Many traders now combine CMF with other indicators such as RSI for maximum effect. Studies show that CMF performs best in analyzing long-term trends, although it still has limitations in detecting price gaps. For optimal results, analysts recommend using CMF primarily on time frames above the daily chart, while confirming with volume-based indicators.

Gate provides these advanced CMF features across all major cryptocurrency pairs, allowing traders to make more informed decisions based on institutional capital flows.

Learn Trading in 5 Minutes | Understand the Role of the Chaikin Money Flow (CMF) Indicator in the Crypto Market

**TL;DR

**

• The Chaikin Money Flow (CMF) is an indicator that measures the flow of money in and out of the market over a certain period.

• This indicator can show the trend, price reversals, and breakout points of a certain asset.

• The activities of whale accounts and institutional investors can influence the price of cryptocurrencies.

• Chaikin Money Flow (CMF) is a line at the bottom of the trading chart.

Introduction

The crypto market consists of two main participants - whale investors and retail investors. Whale investors and large institutional investors are responsible for putting in and withdrawing large amounts of money from the market. Therefore, their activities have an impact on Price trend The impact is greater than that of small retail traders.

Traders should learn to observe the flow of funds in the market at all times, as it can affect the price of specific encryption currencies. Several technical analysis indicators, including the Chaikin Money Flow (CMF), can indicate the flow of funds in the crypto market. For example, if investors buy a large amount of a certain encryption currency, there will be a significant inflow of funds into the market. However, if they sell these currencies, funds will flow out of the market.

This article will discuss how traders can use the Chaikin Money Flow (CMF) indicator to determine when the market is accumulating or distributing cryptocurrencies.

What is the Chaikin Money Flow (CMF) indicator?

The Chaikin Money Flow (CMF) indicator was created by Marc Chaikin in the 1980s to measure the flow of funds over a period of time. Chaikin believes that price fluctuations over different periods are different because some periods have high trading volumes while others have low trading volumes.

Jia Qing Capital Flow Indicator - Soodamooz

Price fluctuations are often more intense when trading volume is high compared to when trading volume is low. Simply put, you can gauge the rise and fall of trends by the size of the trading volume.

When the closing price of an asset is close to its low during an uptrend, it indicates that the uptrend of the asset is weak. When the price of an asset is close to the high of that period, it indicates that the uptrend of the asset is strong. That said, it is important for traders to use the Jiaqing Money Flow Indicator to estimate the strength of the trend, in order to confirm the trend condition and potential reversal and breakout points in the spot market.

The Chaikin Money Flow (CMF) is an oscillator that typically appears at the bottom of trading charts in a single line format. This indicator usually fluctuates around the zero line or midpoint.

Jia Qing Capital Flow Indicator - Daytradetheworld

As shown in the figure above, the green line is the Chaikin Money Flow (CMF) indicator, which oscillates around the zero line.

How to calculate the Chaikin Money Flow (CMF) indicator

To calculate the Jiaqing capital flow indicator, we need four values: the closing price, the lowest price, the highest price, and the trading volume. Although it is ideal to calculate it daily, you can also use any time frame, such as one hour or one week. Typically, the period is 21 days.

With the above four values, you can use the following formula for calculation:

Daily capital flow = [(Closing price - Lowest price) - (Highest price - Closing price) / (Highest price - Lowest price)] * Trading volume

After calculating the daily capital flow, you can use the following formula to calculate the Jia Qing capital flow:

Jia Qing capital flow = 21-day average capital flow / 21-day average trading volume

Typically, the Jiaqing capital flow indicator values range from -1 to +1, although some platforms may sometimes use a range of -100 to 100. Generally, the Jiaqing indicator fluctuates between -1 and +1.

How to use the Chaikin Money Flow (CMF) indicator

When understanding the Jiaqing Capital Flow Indicator, it is crucial to know the role of the midline. For example, if the Jiaqing Capital Flow Indicator is above the midline, it indicates that there is buying pressure in the market. If the indicator is below the zero line, it indicates that there is significant selling pressure in the market.

This indicator is effective in measuring market trends. Therefore, if the market fluctuates, it will give false signals. Essentially, when an asset’s indicator is above the midpoint and moving upwards, it is recommended that you buy that asset.

However, there are situations where the price of a certain asset is rising, but the trading volume is very low, indicating that the upward momentum of that asset is weakening. In this case, its Kaching capital flow indicator will be very low. If this indicator is below the midline and is declining, it is recommended that you sell that asset.

How to determine market trends

It is easy to determine market trends using the Chaikin Money Flow (CMF) indicator. This is because the zero line is the dividing line between upward and downward trends.

If the indicator is above the zero line, and both price and trading volume are rising, it indicates that the asset is in a strong upward trend. When the indicator is below the zero line, and both price and trading volume are decreasing, it indicates that the asset is in a strong downward trend.

Upward Trend - Tradingtechnologies

As shown in the figure above, the price at point A is rising, and the indicator is also above the zero line and rising, indicating a strong upward trend at this time.

divergence

Traders can also make trading decisions using the Jiaqing capital flow indicator divergence. Divergence occurs when the price and the indicator move in opposite directions. Like most oscillators, it typically includes a top divergence and a bottom divergence.

top divergence

When asset prices fall, and the indicator maintains its position or rises, a top divergence occurs.

Jia Qing Capital Flow Indicator Top Divergence - Earnforex

As shown in the figure above, the price is declining while the indicators are rising. Although this is a buy signal at this time, it is still recommended that traders observe the price’s further movements or confirm again with other indicators.

divergence

When the price rises while the indicator remains at its current position or declines, a bullish divergence occurs.

Jia Qing Capital Flow Indicator Bottom Divergence - Earnforex

As shown in the figure above, the price is rising while the indicators are declining. At this point, it is a sell signal, and traders are advised to look for the best exit point for their trades.

Conclusion

In short, the Chaikin Money Flow (CMF) indicator helps traders identify market trends and spot potential signs of price reversals. However, it is best to combine this indicator with other indicators such as moving averages or the Relative Strength Index (RSI).