What is Cumulative Volume Delta (CVD)?
Cumulative Volume Delta (CVD) is the running sum of buy volume minus sell volume on a perpetual futures contract. Rising CVD means aggressive buyers dominate the tape; falling CVD means sellers are in control. Divergence between CVD and price is one of the cleanest reversal signals in derivatives: when price makes a new high but CVD doesn't, the rally lacks buying conviction and is often sold into. Sharpe computes CVD across perp venues with minute-level granularity and overlays it on price for visual divergence detection.
How to use Cumulative Volume Delta (CVD)
Watch for three CVD patterns. First, price-CVD divergence: price makes a higher high but CVD makes a lower high (bearish divergence) — a leading indicator of reversals. Second, CVD-led moves: CVD accelerates before price breaks out, signalling informed buying. Third, CVD exhaustion: CVD flatlines during a price trend, warning that the move lacks support and mean reversion is likely. CVD is most useful during range-bound chop and at major technical levels where divergence resolves.