This is a great indicator to unpack the strength of bounces.

Had a few questions about OBV so here is a very clear example of how to use it and what different scenarios tell us.

On the left, we can see that the BTC price pushed past its nearest local high, then retraced back down to it.

When this happened, the price was level, but OBV had actually moved lower... which signalled weakness.

And as we know, price continued to dump.

Right now we can see that price has pushed locally higher, then retraced back to the same level.

But OBV has stayed higher... which signals strength.

So even though the price has retraced, OBV has not dropped as much.

There are no silver bullets with indicators like this, but they can serve as part of a wider thesis to understand strength at bottoms and tops.