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On-Balance Volume (OBV) Meaning

A technical trading indicator that uses volume flow to predict changes in stock or crypto price. The theory behind OBV is that "volume precedes price." If a coin's price is flat but the OBV is rising, it indicates that "Smart Money" is quietly accumulating positions, and a price breakout is likely imminent.

OBV is calculated by adding the day's volume to a cumulative total when the price closes up, and subtracting the volume when the price closes down. It provides a cumulative picture of buying vs.

selling pressure. Crypto traders use OBV to confirm trends.

If Bitcoin hits a new high price but the OBV fails to hit a new high (a divergence), it serves as a warning sign that the trend lacks strength and a reversal might occur. It helps distinguish between genuine price movements and fake-outs.

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