OBV Indicator (On Balance Volume): Key Principles

The OBV (On Balance Volume) indicator is used in technical analysis to assess the strength of a trend by considering trading volume. Its main principle is that volume precedes price, meaning that if the price rises with high volume, the trend is considered strong. When volume decreases, the trend loses its strength. The indicator adds the volume on up days and subtracts it on down days, creating a cumulative chart that helps traders predict potential reversals or the continuation of current trends in the cryptocurrency market.