Bitcoin VWAP Ratio

source: / @woonomic

About Bitcoin VWAP Ratio

First created by Twitter user @icoexplorer, VWAP stands for volume weighted average price. In effect VWAP is an alternative method to Realised Price in determining average price the market paid for their coins. VWAP to Price ratio is therefore similar to MVRV Ratio and can be used to find market tops and bottoms. The shorter range VWAP Ratios for example over 7 or 90 days can be used to signal ideal top and bottom points for swing trading while the global VWAP signals the macro cycle top and bottoms.

When calculating VWAP, the standard method uses the commodity unit (i.e. BTC) for volume weighting, this chart deviates by using USD units. For Bitcoin due to its exponential rise in price, the two methods create different charts. These differences are small in shorter time cycles, but on longer time cycles the USD method has the effect of putting greater emphasis on more recent historical activity.

This live chart is dedicated to E Easterbrook, upon the request of @icoexplorer. On-chain volume estimates provided by Coin Metrics