Trading Crypto Currencies with the On Balance Volume?

The On balance volume or OBV for short, uses volume flows to predict changes in the underlying asset. The idea is that when an assets volume jumps up with no serious price change immediately - that the price will move consequently. This is similar to the accumulation distribution line in that the indicator is volume dependent. 

What is the On Balance Volume

The OBV is a whale indicator as it looks for larger institutional trades as indicators of the smart money moving into a particular asset. As the larger traders come into a market and the price is met by sellers and there is no change it indicates a change in the volume flow. 

How does the On Balance Volume work?

The on balance volume is a running total of volumes.

Closing price is above the prior close price then:
Current OBV = Previous OBV + Current Volume

Closing price is below the prior close price then:
Current OBV = Previous OBV - Current Volume

Closing prices equals the prior close price then:
Current OBV = Previous OBV (no change)

Example Chart On Balance Volume and Analysis

If you at the Ether BTC price chart you can see a clear period where the on balance volume turns from a negative to positive gradient as volume upticks and the price follows into a strong bull market. The second red section shows a reversal in the on balance volume from a positive trend to a negative trend and the price begins to fall.

This website is only provided for your general information and is not intended to be relied upon by you in making any investment decisions. You should always combine multiple sources of information and analysis before making an investment and seek independent expert financial advice.

Where we list or describe different products and services, we try to give you the information you need to help you compare them and choose the right product or service for you. We may also have tips and more information to help you compare providers.

Some providers pay us for advertisements or promotions on our website or in emails we may send you. Any commercial agreement we have in place with a provider does not affect how we describe them or their products and services. Sponsored companies are clearly labelled.