OBV (On-Balance Volume)
Indicator measuring trend strength through cumulative volume.
Beginner-friendly explanation
OBV is a technical indicator that adds or subtracts volume based on price direction. When price goes up, daily volume is added to OBV. When price goes down, it's subtracted. This helps check if volume confirms the trend.
Example: If Bitcoin rises with high volume and OBV also increases, this confirms the bullish trend.
Intermediate-level insight
OBV accumulates volume based on closing price changes. A divergence between OBV and price (e.g., OBV drops while price rises) can indicate a trend reversal. It's used to anticipate moves before price reacts.
Example: Ethereum is rising but OBV is flat or falling — this may signal weakening momentum.
Advanced perspective
OBV detects capital inflows and outflows, especially in consolidation phases. Used alongside support/resistance or channel breakouts, it can enhance breakout or trend-following strategies.
Example: A bullish breakout in OBV before the price breakout can justify an early entry in a breakout strategy.
Technical & Chart Analysis
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