On-Balance Volume
OBV is a cumulative series. Volume is added when the close is above the previous close and subtracted when the close is below the previous close.
The absolute OBV number is often less important than its direction, trend and relationship with price.
Chaikin Money Flow
CMF evaluates where the close occurs within each period's high-low range, weights that relationship by volume, and aggregates it over a lookback window.
Positive CMF indicates the calculation is weighted toward closes in the upper part of ranges; negative CMF indicates the opposite.
OBV vs CMF
OBV uses whether the close rose or fell versus the previous close. CMF uses the close's location within the current high-low range and volume.
Because the inputs differ, OBV and CMF can disagree.
Volume-price divergence
Traders sometimes compare whether OBV or CMF confirms new price highs or lows. Non-confirmation can identify a divergence worth investigating.
It does not guarantee a reversal.
Important limitations
Crypto volume is venue-specific. An indicator calculated from one exchange's volume does not automatically represent all global trading activity.
How OBV accumulates volume
OBV is a cumulative series. In its common form, volume is added when the current close is above the previous close and subtracted when the current close is below the previous close; an unchanged close generally leaves the series unchanged.
Because the level is cumulative, traders often focus more on the direction, trend or divergence of OBV than on its absolute numerical value.
How CMF combines price location and volume
Chaikin Money Flow uses where the close sits within the period's high-low range to create a money-flow multiplier, combines that value with volume, and aggregates it across a lookback window.
Values above and below zero are commonly interpreted as positive or negative money-flow pressure under the indicator's formula, not as a direct record of every buyer and seller.
Crypto volume depends on the data source
Crypto trades across many venues, so the volume on one exchange is not automatically the volume of the entire market. OBV and CMF calculated from different venue feeds can therefore differ.
Spot volume and derivatives volume also represent different activity. A strategy should document which market and data source supplies the volume input.
They cannot recover trading activity that is absent from the dataset, and divergence alone does not prove that price must reverse.
Key takeaways
- OBV is a cumulative volume series based on close-to-close direction.
- CMF combines volume with the close's position inside the period range.
- The indicators can disagree because their calculations differ.
- Crypto volume depends on the venue supplying the data.
Sources & further reading
This lesson is educational material. Market structure, exchange rules, fees, margin requirements and derivatives mechanics can differ by venue and can change over time. Verify current rules with the venue you use.