Coinlegs Academy

OBV Divergence

If price movements and OBV do not support each other, a mismatch occurs. This is called "OBV Divergence" or balance trading volume mismatch. In other words, if the OBV value decreases while the price is rising, or if the OBV value is increased when the price is falling, a mismatch is detected. Mismatches between OBV and price movements are interpreted as the trend will soon change in the direction of the OBV movement. If price decreases while OBV increases, prices are expected to increase, if the price increases while OBV decreases, prices are expected to decrease. Investors can take advantage of this mismatch to predict the direction of the trade. Generally, when interpreting OBV, investors think that OBV changes precede changes in prices.
​In order to easily obtain OBV Divergence detections, you can create Alerts or Custom Signals through the Coinlegs system, and start autotrading bots on LegsBot by using the alerts you create.