OBV stands for On-Balance Volume, which is a technical analysis indicator used by traders and investors to measure buying and selling pressure in a market. It was developed by Joseph Granville in the 1960s.
Granville's theory was only a small number of big players are really important in the market. What they do is going to decide price. Conversely, the smaller players in the market are usually late to the move and act based on herding principles. So into market turns we should expect to see a small number of big sellers and a large number of small buyers.
When we have divergences in OBV the idea is it's telling us that there's a small amount of big sellers off loading their positions from earlier and these are being bought by a large amount of enthusiastic small buyers.
And the BTCUSDLONGS is telling the same story.
The BTCUSDLONGS index represents the total value of long positions (bullish bets) on Bitcoin, specifically denominated in US dollars.
It reflects the collective sentiment of traders who believe that Bitcoin’s price will rise.
This tells us 60% of the long volume in BTC has exited in the last year. The bulk of it into the recent rally.
This is really interesting because the current theme of bullish forecasts is the big money is getting in and this will drive prices to astronomical prices. In reality, we can see the OBV suggesting to us big money has not been a buyer during the rally and appears to be a net seller and the volume of longs is crashing.
At the same time, we have a tangible peak in euphoria. Enthusiasm for BTC between small retail traders is as high as it's ever been and few people seem to believe it's even possible they get long term rugged on this. The very notion that there are big sellers in the market exiting into a liquidity hype is something they entirely disregard.
But if we look at the instruments that are intended to help us to track these, they're actually implying this is what is happening.
There are not significant net inflows being triggered by the ETF, there are significant net sellers.
Something to consider when it comes to big money, big money is often entering a position with a target in mind. Big money usually understand the notion of it not being a profit until you take it. The idea big money is going to get in and follow the YOLO spirit of the public forums could be a bit misleading.
It might turn out to be the case that having big money buying in previously is now a problem because it means you have concentrated sellers.
BTC bulls think because a new high was made then the follow through rally is inevitable. It is if it's a real breakout. Not if it's a false breakout.
If you're a big player with a lot of profit to bank, where's better to be banking it than at all time high?
Especially if you concurrently have a flood of people willing to buy at any price to avoid missing out big on the next sensational rally.
If you're a buyers of BTC here, who do you think is selling to you?
From the volume, it'd appear to not just be the silly bears who do not know better than supply shorts to the market.
It'd seem like some heavy profit taking from people in much lower.
Granville's theory was only a small number of big players are really important in the market. What they do is going to decide price. Conversely, the smaller players in the market are usually late to the move and act based on herding principles. So into market turns we should expect to see a small number of big sellers and a large number of small buyers.
When we have divergences in OBV the idea is it's telling us that there's a small amount of big sellers off loading their positions from earlier and these are being bought by a large amount of enthusiastic small buyers.
And the BTCUSDLONGS is telling the same story.
The BTCUSDLONGS index represents the total value of long positions (bullish bets) on Bitcoin, specifically denominated in US dollars.
It reflects the collective sentiment of traders who believe that Bitcoin’s price will rise.
This tells us 60% of the long volume in BTC has exited in the last year. The bulk of it into the recent rally.
This is really interesting because the current theme of bullish forecasts is the big money is getting in and this will drive prices to astronomical prices. In reality, we can see the OBV suggesting to us big money has not been a buyer during the rally and appears to be a net seller and the volume of longs is crashing.
At the same time, we have a tangible peak in euphoria. Enthusiasm for BTC between small retail traders is as high as it's ever been and few people seem to believe it's even possible they get long term rugged on this. The very notion that there are big sellers in the market exiting into a liquidity hype is something they entirely disregard.
But if we look at the instruments that are intended to help us to track these, they're actually implying this is what is happening.
There are not significant net inflows being triggered by the ETF, there are significant net sellers.
Something to consider when it comes to big money, big money is often entering a position with a target in mind. Big money usually understand the notion of it not being a profit until you take it. The idea big money is going to get in and follow the YOLO spirit of the public forums could be a bit misleading.
It might turn out to be the case that having big money buying in previously is now a problem because it means you have concentrated sellers.
BTC bulls think because a new high was made then the follow through rally is inevitable. It is if it's a real breakout. Not if it's a false breakout.
If you're a big player with a lot of profit to bank, where's better to be banking it than at all time high?
Especially if you concurrently have a flood of people willing to buy at any price to avoid missing out big on the next sensational rally.
If you're a buyers of BTC here, who do you think is selling to you?
From the volume, it'd appear to not just be the silly bears who do not know better than supply shorts to the market.
It'd seem like some heavy profit taking from people in much lower.
Prices are 300% higher than then.
Why are less people interested in being long?