OBV, or On-Balance Volume, is a technical indicator that uses volume flow to predict price changes in an asset. This momentum indicator calculates a running total of trading volume, adding volume on days when the price closes higher and subtracting it on days when the price closes lower. A rising OBV suggests accumulation and increasing buying pressure, indicating potential upward price movement. Conversely, a declining OBV points to distribution and increasing selling pressure, often preceding a price decrease.
Context
OBV is frequently cited in crypto market analysis to confirm price trends or identify potential divergences between price and volume action. News reports often mention OBV when discussing the strength of a price move or anticipating a market reversal. A divergence, where price moves in one direction but OBV moves in the opposite, can signal a weakening trend. Traders utilize OBV alongside other indicators to validate their market hypotheses and make informed decisions.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
