The average price everyone actually paid today — and why so many traders watch it.
VWAP (volume-weighted average price) is the average price of an asset over a period, weighted by how much traded at each price. Prices where a lot of volume changed hands count more than prices where little did.
How it is calculated
For each bar, multiply a typical price (often the average of high, low and close) by the bar's volume. Add those up from the start of the period and divide by the total volume over the same period. The result is one line that updates with every bar — and because it is cumulative, it moves less as the session goes on.
Session VWAP vs anchored VWAP
- Session VWAP restarts at a fixed time each day. Crypto trades around the clock, so the reset time is a choice; many traders use the UTC day.
- Anchored VWAP starts from a point you pick — a swing high or low, a breakout, a news event — and shows the average price paid since then.
- VWAP bands add standard-deviation bands around the line to show how stretched price is from the average.
How traders use it
Fair-value referenceAbove VWAP, buyers in the period are on average in profit; below it, sellers are. Many traders read that as a simple measure of who is in control.
Dynamic levelPrice often reacts on the first return to VWAP, especially in trending sessions.
StretchPrice far from VWAP (outside the outer bands) is extended; moves back towards the line are common, though not guaranteed.
VWAP lags by design: it averages the past. It is a reference for where value has been, not a forecast of where price will go.
VWAP vs moving average
A moving average weights every bar equally over a fixed window. VWAP weights by volume and accumulates from an anchor. On a quiet bar, VWAP barely moves; after a heavy-volume move, it shifts more than a moving average would. Pair it with volume profile to see where that volume actually sits.
VWAP in LiveTradingAI
LTAI Chart includes VWAP — including a session-anchored version — among its 100+ indicators, alongside volume profile and cumulative delta, free in the browser on live Binance data. Open LTAI Chart →
This page is educational. It is not financial advice and nothing here is a recommendation to enter any trade. Trading carries substantial risk of loss.
Frequently asked questions
What is VWAP?VWAP, the volume-weighted average price, is the average price over a period weighted by the volume traded at each price. It is widely used as a fair-value reference.
How is VWAP calculated?Multiply each bar's typical price by its volume, add those values from the start of the period, and divide by the total volume over the same period.
What is anchored VWAP?Anchored VWAP starts the calculation from a point you choose, such as a swing low or a news event, showing the average price paid since that moment.
Does VWAP work for crypto?Yes, but crypto trades 24/7, so the session reset time is a choice. Many traders reset at the start of the UTC day or use anchored VWAP instead.
Is price above VWAP bullish?It means buyers in the period are on average in profit, which many traders read as buyers in control. It is context, not a signal on its own.
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