Money Flow Index (MFI)

Volume-weighted momentum oscillator (0-100) combining price and volume to identify overbought/oversold conditions and potential reversals

Property	Value
Category	Valuation Metrics
Unit	Index (0-100)
Resolution	1d
Assets	BTC
Tier	Basic
API Endpoint	GET /v1/holder/valuation
Field	mfi

Overview

Money Flow Index (MFI) is a momentum oscillator that measures the flow of money into and out of Bitcoin over a specified period. Often called the volume-weighted RSI, it incorporates both price and volume data to provide a more comprehensive picture of buying and selling pressure than price-only oscillators.

> Volume source: This metric uses spot exchange trading volume in USD (not on-chain transfer volume). This reflects actual market trading activity across centralized exchanges.

Formula

$$\text{Typical Price} = \frac{\text{High} + \text{Low} + \text{Close}}{3}$$ $$\text{Money Flow} = \text{Typical Price} \times \text{Volume}$$

Money flow is classified as positive when today's typical price exceeds yesterday's, and negative otherwise.

$$\text{Money Ratio} = \frac{\sum_{i=1}^{14} \text{Positive Money Flow}_i}{\sum_{i=1}^{14} \text{Negative Money Flow}_i}$$ $$\text{MFI} = 100 - \frac{100}{1 + \text{Money Ratio}}$$

Interpretation

• MFI above 80 is generally considered overbought, suggesting the asset may be due for a pullback
• MFI below 20 is generally considered oversold, suggesting a potential buying opportunity
• Divergence between MFI and price (e.g., price makes a new high but MFI does not) can signal weakening momentum
• The 14-day lookback period balances responsiveness with noise reduction

Use Cases

• Overbought/oversold detection: Identify extreme conditions that may precede reversals
• Divergence trading: Spot situations where volume-weighted momentum diverges from price
• Trend confirmation: Use alongside price trends to confirm whether volume supports the move
• Cycle analysis: Track how money flow patterns change across Bitcoin market cycles

API Usage

curl -H "Authorization: Bearer YOUR_API_KEY" \
  "https://api.blocklens.co/v1/holder/valuation?start_date=2024-01-01&end_date=2024-12-31&limit=365"

Related Metrics

• Volume Price Trend (VPT) — Cumulative volume-weighted price momentum indicator that confirms trend strength by measuring whether volume flows into or out of an asset
• On-Balance Volume (OBV) — Cumulative volume flow indicator that tracks whether volume is flowing into or out of an asset based on price direction
• Mayer Multiple — Ratio of Bitcoin price to its 200-day simple moving average (SMA-200), indicating whether BTC is overvalued or undervalued relative to its long-term trend