OBV stands for On-Balance Volume.
It tries to observe buying and selling pressure through volume changes.
How OBV Works
If price rises with volume, OBV rises.
If price falls with volume, OBV falls.
Users often watch whether price and volume are confirming each other.
What Divergence Means
If price makes a new high but OBV does not, upside momentum may be weakening.
If price makes a new low but OBV does not, downside pressure may be weakening.
But divergence is only a warning, not a reversal guarantee.
Common Mistake
Many people think OBV can predict trend in advance.
OBV can also create false signals, especially in low-liquidity assets.
Abnormal volume may come from short-term events, not long-term trend.
Historical Context
OBV was popularized by Joseph Granville in the 1960s. Its core idea is that volume changes may lead price changes. Its historical importance is turning price-volume relationships into an observable indicator. In crypto, however, fragmented exchanges, wash trading, and derivatives activity can distort OBV.
The Value of AlphaPony
AlphaPony, the AI investment assistant under CZCC, can combine OBV divergence, abnormal volume, and price breakout into alerts, reducing single-indicator misreads.
Conclusion
OBV helps observe price-volume relationship, but it is not a prediction tool.
Ordinary users should treat it as a volume-flow alert and combine it with trend and risk review.
This article is for educational and informational purposes only and does not constitute investment advice. Crypto assets are highly volatile. Please make decisions based on your own risk tolerance.