Guides › Bitcoin order flow and CVD: how to read buying and selling pressure
Bitcoin order flow and CVD: how to read buying and selling pressure
Order flow studies who is actually pushing the price. Every trade has two sides: the maker, who had a limit order resting in the book, and the taker, who arrives with a market order and fills it. The taker is the aggressor: they are in a hurry to get in or out.
Volume delta
A candle's delta is the volume bought by takers minus the volume sold by takers. A strongly positive delta means aggressive buying; a strongly negative one, aggressive selling. In RadarFlow the "Current candle delta" gauge triggers when that imbalance exceeds 12% of volume.
CVD: cumulative delta
CVD (Cumulative Volume Delta) adds up delta candle after candle. It is most useful when compared with price:
- Price and CVD rising together: the rally is backed by aggressive buying.
- Price and CVD falling together: the drop is backed by aggressive selling.
- Divergence: price makes a lower low but CVD does not, or the opposite at highs. It can signal exhaustion of sellers or buyers.
- Absorption: a lot of delta in one direction without price moving suggests large limit orders are absorbing that pressure.
Combining it with open interest
Order flow becomes more meaningful when crossed with open interest: a rally with positive CVD and rising open interest suggests new longs entering, while a rally with falling open interest is usually short covering, a weaker move. RadarFlow combines these readings into a single confluence score.