A couple of days ago one of my reader asked me about price and volume divergence, i decided to answer to him with this post talking again about it.
All the readers that follow me since 2011 know that i use a “net volume” indicator to understand the activity of buyers and sellers, it is computed taking the difference of a security’s uptick volume minus its downtick volume over a specified period, here i compute it on a daily basis with a 7 bars summation (an entire week because it’s a daily chart).
Often traders use such an indicator to judge the momentum or trend of a security in order to make assumptions about its future price movements. Net volume is an indicator that is also very similar to the idea of money flow and its indicator, the money flow index.
Now BTCUSD is hesitating around a price resistance (first positive deviation line of VWAP) but net volume is positive and till it remains positive i do not expect to see stronger down movements in the price, although we might see some consolidation beetwen the VWAP at 765$ and the actual price of $900.
Bitcoin Trading Ideas, Analysis 
Hi Enky
Can you write here the VWAP price for MTGOX?
Thanks,
Amit
Thanks!
Enky, where is the Net Volume Oscillator indicator located? I could not find it in SierraChart.
Thanks for keep posting, I would like to kindly ask you, what is your key for resetting the VWAP. Sometimes you reset it on 1th of each month and this time it seems to be 17th or 18th November. The value of VWAP is different then.
If I’ve got it right, resetting on 1th of each month is for short/mid-term VWAP and this is more-likely mid/long-term VWAP but why 17th November? Because the real rally start right since then?
The $765 support appears to have held as u mentioned. Nice!
Enky,
not to beat a dead horse, but it is truly uncanny how the low on bit stamp, exactly at $765.
newsbtc.com/2014/01/09/coinbase-teams-bitmonet-make-bitcoin-app-purchases-reality/
Also, check out this article. Bitmonet.com maybe the one to save the newspaper industry. The Achilles heel for the newspaper industry has been that no one wants to pay for reading their articles, given the only choice is to either monthly subscription or nothing. Bitmonet will allow the industry to have readers pay per article. Wow. That is where the CD industry went but still at a buck that is still not a workable model
There are many micropayment solutions for the newspaper industry (like Tinypass, for example), but big media never implemented them widely. BitWall (https://www.bitwall.io/) for now offers the sanest solution, if you ask me, and it uses Coinbase, too.
What about Cex.io’s mining power issue? Do you think we will see a strong influence?
Enky, the issue is more generic. Theoretically, GHash.IO can gang up with BTC Guild and own more than 60% of the mining. When it comes to billions of dollars, even the theoretically impossible things come true, so, let’s not ignore the issue. Instead, we need to voice it, and make sure people are watching more closely, and preventing abuse!
Hello,
It’s always nice to read your blog 🙂 What do you think is the trend for the next few days? Do you think the rate will pass the resistance or it will go under 875?
Thank you for your reply. What do you think of this scenario?
https://www.tradingview.com/v/AJZnVjUA/
Ok, thanks 🙂
Enky, I’ve always wondered: Coinbase uses Bitstamp and if a lot of big volume e-commerce store adopt it, it will generate a constant flow of BTC sales. Won’t this be a constant factor to drag Bitcoin price down? At the end of the day, neither BitPay, nor Coinbase stimulate commerce in BTC, on the contrary, they make it too easy for people not to try to really adopt Bitcoin, i.e. keep Bitcoins in their own wallets and flood markets with sales.
I find your net volume oscillator very interesting. Mind sharing the code? A picture?