A story of 2 Fractals. Is #Bitcoin doomed to repeat itself? #BTC
I drew the lines for January in Red and the current situation in Blue (and Magenta).
Firstly, while many might be familiar with the CMF , the OBV seems to be less prevalent. It is very simple but very powerful. Here is how it is calculated:
When the current close is higher than the previous close:
OBV = Previous OBV + of the closed candle
When the close is lower than the previous close:
OBV = Previous OBV - of the closed Candle
What this conveys is the acceleration of in a given direction. So, for example, if the price retraces a decent amount after a good move up, but the OBV doesn't move as much or even moves up, it means that there is not much in the down move i.e. very little selling compared to buying. This is a good indication of strength in the uptrend. This is how the OBV is used to spot divergences between what we see in price and what is actually happening in the order books.
Now, back to our current structure. When you compare the current price action and it's corresponding OBV/CMF divergences you can see that although there is some similarity in the price pattern to that in January, but the OBV is showing a comparatively significant divergence in buying behaviour by the bulls.
One other thing to keep in mind is the pattern in magenta. I don't think we will see much sideways action left here. A decision will be made.
Again, it is very possible we see a dump in the same manner as January 10th, but to make that decision purely on the shared structures could be a mistake those shorting the market right now.