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Technical Analysis 1 min read

OBV — On-Balance Volume

Also known as: On-Balance Volume

Cumulative volume that adds volume on up days and subtracts it on down days — a clean way to see whether money is flowing into or out of an asset.

What OBV tells you

On-Balance Volume is the simplest way to ask the chart a single question: "Is volume confirming the price move, or fighting it?"

The recipe is almost trivial:

  • Close up → add today's volume to the running total
  • Close down → subtract today's volume
  • Close flat → do nothing

Over time you get a line that ignores absolute volume and shows net flow — pure accumulation vs distribution.

How to use it on Exum

  1. Trend confirmation. If price is grinding higher and OBV is grinding higher with it, buyers are real. If price pushes higher but OBV goes sideways or down, the rally is running on thin volume and is more fragile.
  2. Divergence. Compare swing highs and lows on price with swing highs and lows on OBV. Mismatch = early warning.
  3. Breakouts. A breakout on strong OBV expansion is far more reliable than one where OBV barely moves.

Limits to know

  • OBV treats every up-day equally regardless of how small the close was. A +0.01% candle adds the full volume of the day.
  • Works best on assets with consistent volume reporting — perfect for BTC/ETH, less useful for illiquid tokens.
  • Needs a trend context. In a sideways market OBV chops around and can be misleading.

OBV pairs well with MACD and Divergence analysis. Together they catch most meaningful turns before RSI does.

Frequently asked

What does OBV actually measure?
Net accumulation or distribution pressure. You add the whole candle's volume when the close is up, subtract it when the close is down. The absolute number is meaningless — only direction and shape matter.
How do I read OBV divergence?
Price makes a new high but OBV does not → bearish divergence, buyers are getting exhausted. Price makes a new low but OBV does not → bullish divergence, sellers are running out.
Is OBV better than just looking at volume bars?
OBV smooths the noise and makes the *trend* of volume obvious. Raw volume bars are better for spotting single-bar spikes; OBV is better for reading the bigger picture.