Reading the chart 4 / 6
Reading the chart · Level 1Lesson 4 of 5

VWAP and anchored VWAP: the average price, weighted by volume

VWAP is the average price everyone paid, with every coin counted once. It answers a simple question: is the average buyer since a chosen moment in profit or at a loss?

You will learn
  • How VWAP is calculated, step by step
  • Why the day's VWAP restarts, and what it means when price is above or below it
  • What an anchored VWAP is — and why the anchor is a choice

Before you start: The lesson on volume and the volume profile.

The average price, coin by coin

A simple average of prices treats a quiet minute and a frantic one the same. The volume-weighted average price (VWAP) does not: each price counts as many times as coins traded at it.

VWAP = Σ (price × volume) ÷ Σ volume

From individual trades the result is exact. Charts usually build it from candles, using each candle's typical price, (high + low + close) ÷ 3, as its price. That is how the terminal calculates it, restarting every day at 00:00 UTC — crypto trades around the clock, so "the day" is a convention.

VWAP — 2 October 2026, hour by hour. After the first hour the VWAP was that hour's typical price, 84,816. 01:00 traded only 373 BTC and barely moved it; 04:00 traded 2,678 BTC and pulled it from 85,063 to 85,711. At the day's high of 87,220 (12:00) the VWAP was 86,090. At 14:00 price closed at 85,687, under the VWAP of 86,123. The busiest hour, 17:00 with 3,628 BTC, dragged it from 86,045 to 85,838. At midnight the VWAP stood at 85,600 and price at 84,518: −1.3%.

Above or below it

Price above the day's VWAP means that whoever bought at the day's average price so far is in profit; below, at a loss. Large traders also use VWAP as a yardstick: an order filled below the day's VWAP was bought cheaper than the average that day.

Anchored VWAP: start where you choose

An anchored VWAP does not restart each day. It starts at a candle you choose — a top, a low, a big news day — and keeps adding every candle since. It answers: what is the average price paid since that moment?

The terminal picks its anchors automatically — usually at the latest change of structure or a sharp move, ideas of the Smart Money Concepts module — and draws up to two.

Anchored VWAP — BTC daily, September 2025 to January 2026. Anchored at the all-time high of 126,200 on 6 October 2025, the line stood at 118,202 on 10 October. Price closed above it on 3 days, 26 to 28 October; from 30 October to the end of January not one daily candle reached it, and the January rally peaked at 97,924, 0.9% under it. Anchored at the low of 21 November (80,600) instead, the line ran through December and January: price touched it on 23 of 56 days.

Check yourself · 1 of 3Two hours trade at 100 and 110. The first trades 9 BTC, the second 1 BTC. What is the VWAP?
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(100 × 9 + 110 × 1) ÷ 10 = 101. The heavy hour counts nine times as much.

Check yourself · 2 of 3Price is 1.3% below the day's VWAP at midnight. What does it say?
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It compares the price with the average paid that day. It forecasts nothing — and tomorrow's VWAP starts again.

Check yourself · 3 of 3What decides where an anchored VWAP starts?
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The anchor is a choice: a top, a low, an event. Each choice gives a different line.

Takeaways
  1. VWAP = Σ(price × volume) ÷ Σ volume: heavy periods count more.
  2. From candles it uses the typical price, (high + low + close) ÷ 3 — an estimate of the exact VWAP.
  3. The terminal's daily VWAP restarts at 00:00 UTC.
  4. Above the VWAP, the average buyer is in profit; below it, at a loss.
  5. An anchored VWAP starts at a candle you choose; the anchor changes the line.

Open BTC in the terminal — VWAP and anchored VWAP are under the line-chart button above the chart

Further reading

Education only, not financial advice · Updated 28 Oct 2026 · Data: Binance · Report a mistake