Today we will see one of the best Crypto indicator for the Bitcoin market, of course the indicator is also for other markets like stocks and forex but we will focus on Bitcoin.
Technical analysis is an easy process we can see if a currency is in uptrend or downtrend and beyond that we can make support and resistance, but here comes OBV (On Balance Volume) to show us market confirmations for when a move is real and when not, also we can use it for confirmations in small time frames for day trading.
Table of Contents
What is OBV (On Balance Volume)
OBV is a technical analysis indicator intended to correlate price and volume in the stock market. The benchmark indicator was developed by Joe Graville in 1963 and since then millions of traders have consulted this specific indicator.
Install OBV in TragingView
First we will need to have a TradingView account to do the setup. If you don't know how Tradingview works you can see the detailed guide here
What is TradingView and how does it work?
We enter the home page, then go to the category Indicator and Search write OBV and click on the first option On balance volume
Scouting, I have changed the colors, you can put whatever you want.
How does OBV work?
We can use this specific indicator in several ways scouting I choose two.
- OBV Divergence
- OBV Support / Resistance
OBV Divergence
The first way is the Divergence between the OBV and the price in simple terms when the price goes up and the obv chart goes down as soon as the second peak goes lower we are looking for exit points it is a confirmation to tell us that the price does not want to go any higher.
Also the same way is when the price drops and the O.B.V. goes up as soon as it creates and the second peak we look for points for buy.
OBV Support / Resistance
The second strategy that one can follow is support and resistance, i.e. you wait for it to break Resistance in obv and then looking to find buy places it time frame that I look at in the chart below is in 1d
It works in small time frames where we can enter buy or sell positions depending on the confirmation we will have.
Summary
OBV is one of the most important indicators that we should all look at and consult. had given confirmation even for the great fall of bitcoin.
I look forward to your comments below
DISCLAIMER: Cryptocurrency trading is VERY dangerous. Make sure you understand these risks if you are a beginner. The Information in the post is my OPINION and not financial advice. You are responsible for what you do with your money.
