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cointelegraph.com TWAP vs. VWAP in crypto trading: What’s the difference?

Algorithmic trading strategies in crypto Algorithmic trading has become a go-to for many traders as it lets you automate trades based on specific rules — no emotions, no hesitation, just pure logic. These strategies can scan markets 24/7, react instantly to price movements, and handle large volumes way faster than a human ever could.Some common algo trading strategies include:Trend following: riding the wave of upward or downward momentum.Arbitrage: taking advantage of price differences across exchanges.Market making: placing buy and sell orders to profit from the spread.Mean reversion: betting that prices will return to their average over time.Now, within the world of algorithmic trading, there’s a special group called execution algorithms. These aren’t about predicting where the market is going — they’re about how to get in or out of a position without moving the market too much. They’re especially useful for handling large orders discreetly.A key subset of these is passive order execution strategies. These aim to minimize slippage and get you as close as possible to a fair average price. The two big names here are:Time-weighted average price (TWAP): splits your order into equal parts over time, ignoring volume. It’s great for low-liquidity situations or when you want to stay under the radar.Volume-weighted average price (VWAP): adjusts your trade size based on market volume, placing bigger trades when activity is higher.Both help you avoid tipping off the market and are essential tools in the crypto trader’s toolkit. What is time-weighted average price (TWAP)? TWAP, or time-weighted average price, is one of the simplest and most widely used execution strategies in algorithmic crypto trading. At its core, TWAP helps traders break down a large order into smaller trades, executed evenly over a set period of time — regardless of market volume. The goal? To get an average price that reflects time, not market activity, and to avoid causing sudden price moves.This strategy is especially useful in two scenarios: when you’re trying to quietly execute a large trade without alerting the market and when you’re trading in low-liquidity environments where even moderate orders can move prices. By pacing your trades, TWAP helps reduce slippage and keeps your activity under the radar.Its biggest strength is its simplicity — it’s easy to implement and understand. But that simplicity also comes with a tradeoff: TWAP doesn’t account for trading volume. So, during high-volatility periods or sudden market shifts, it might miss key signals and give you an execution price that doesn’t reflect the true state of the market.In short, TWAP is a great option when you need to trade steadily over time, especially in quieter markets. But if volume and volatility are major concerns, it might not always give you the best result.Did you know? You can easily add TWAP (time-weighted average price) to your trading setup on platforms like TradingView by simply opening your chart, clicking “Indicators” and searching for “TWAP.”  How to calculate TWAP To calculate TWAP, you take the price of the asset at regular time intervals, add them all up, and divide by the number of times you checked the price.Here is the formula to calculate TWAP:In layman’s terms, the formula looks like this:TWAP = (Price₁ Price₂ ... Priceₙ) / nLet’s walk through an example.Say you check the price of Bitcoin (BTC) every 10 minutes and get the following:90,000 → 90,100 → 89,900 → 90,050Now add them together:90,000 90,100 89,900 90,050 = 360,050Then divide by the number of intervals (4):TWAP = 360,050 ÷ 4 = 90,012.5 What is volume-weighted average price (VWAP) VWAP stands for volume-weighted average price, and it’s a go-to metric for traders who want a more realistic sense of an asset’s average price throughout the day. Unlike TWAP, which just averages prices over time, VWAP factors in how much volume was traded at each price. That means prices with more trading activity carry more weight in the final average — making it a better reflection of where the market actually values the asset.Traders often use VWAP as a benchmark. If you buy below VWAP, you’re likely getting a better-than-average deal compared to the rest of the market. It’s also handy for spotting trends — if the current price is above VWAP, the market’s probably bullish; if it’s below, that could be a bearish signal.VWAP has its advantages: It gives a more accurate picture of market value and can help identify when an asset might be overbought or oversold. But it’s not perfect. It’s more complex to calculate and can get thrown off by a few unusually large trades, which might skew the average.All in all, VWAP is a powerful tool for traders who want deeper insight into market dynamics, but like any indicator, it works best when used alongside other signals.Did you know? ​The term volume-weighted average price (VWAP) was first introduced to the trading community in a March 1988 Journal of Finance article titled “The Total Cost of Transactions on the NYSE” by Stephen Berkowitz, Dennis Logue, and Eugene Noser Jr. In this paper, the authors presented VWAP as a benchmark for assessing the quality of trade executions by institutional investors. How to calculate VWAP VWAP works a bit differently. Instead of treating each price equally, it gives more weight to prices where more trading volume occurs. Here is the formula to calculate VWAP:In plain terms, the formula is:VWAP = (Price × Volume at each point, all added up) ÷ Total VolumeLet’s go through an example.Say you have this data for BTC:90,000 at 10 trades90,100 at 20 trades89,900 at 5 trades90,050 at 15 tradesFirst, multiply each price by its volume:90,000 × 10 = 900,00090,100 × 20 = 1,802,00089,900 × 5 = 449,50090,050 × 15 = 1,350,750Now add those results:900,000 1,802,000 449,500 1,350,750 = 4,502,250Then calculate the total volume:10 20 5 15 = 50Finally, divide the total value by the total volume:VWAP = 4,502,250 ÷ 50 = 90,045 When to use TWAP vs. VWAP? It really comes down to what kind of trade you’re making and what the market looks like at the time.If you’re trading during busy hours and want to make sure you’re not overpaying — or underselling — compared to where most of the action is happening, VWAP is your friend. It gives you a sense of the market’s “true” average price by factoring in volume, so it’s great for benchmarking your trades or timing your entry and exit in line with market momentum. If you’re buying below VWAP, you’re likely getting a solid deal.TWAP, on the other hand, is better when you’re trying to stay under the radar. Maybe you’re dealing with a less liquid coin, or you’re trading at a quieter time of day when volume is all over the place. In that case, TWAP helps you slowly work your way into or out of a position without spooking the market. It doesn’t care about volume — it just paces your trade out over time in equal chunks.So, big picture: Use VWAP when you’re following the crowd and want to time things smartly. Use TWAP when you’d rather move quietly and keep things simple. TWAP vs. VWAP: Key differences to be aware of TWAP and VWAP in crypto trading Traders and institutions use TWAP and VWAP to minimize market impact and secure better execution prices. Let’s look at two real-world examples that show how these algorithms perform when the stakes are high.1. Strategy’s $250-million Bitcoin buy with TWAPBack in August 2020, Strategy (called MicroStrategy at the time) made headlines by announcing a $250-million investment in Bitcoin (BTC) as a treasury reserve asset. Rather than entering the market all at once — and risking a sharp price jump — they partnered with Coinbase and used a TWAP strategy. By spreading the purchase out over several days, Strategy was able to blend into market activity, minimizing slippage and securing a favorable average price.2. Definitive’s TWAP strategy for Instadapp (INST)A major crypto VC firm used TWAP to handle a large position in Instadapp (INST), a decentralized finance token known for its low liquidity. Over two weeks in July 2024, it executed the trade in small chunks using Definitive’s TWAP algorithm. The result was a 7.5% improvement over what it would’ve paid using VWAP, and gas fees made up just 0.30% of the $666,000 order. It was a clear win in terms of both cost-efficiency and stealth execution.3. Kraken Pro and the use of VWAPKraken offers advanced trading capabilities through its Kraken Pro platform, which includes VWAP as a built-in technical indicator for traders. On Kraken Pro, users can access VWAP directly in the charting interface, powered by TradingView integration, to analyze crypto assets across various timeframes.For instance, a trader on Kraken Pro might use VWAP to optimize a Bitcoin trade. They could set up an order to buy BTC when the price dips below the daily VWAP — indicating it’s trading below the volume-weighted average and potentially undervalued — and sell when it rises above, suggesting overvaluation or profit-taking opportunities. Institutional clients and high-volume traders, in particular, rely on Kraken’s VWAP functionality for precision in the fast-moving crypto market.Whether you’re managing a big order or just trying to get a fair entry, knowing when and how to use both TWAP and VWAP can give you a serious edge in the market.Happy crypto trading! 

news.bitcoin.com Solana’s Best Meme Coin Picks and Time-Sensitive Presale Opportunities Amid ETF Hype According to Neo Pepe

This content is provided by a sponsor. Solana ETF filings spark renewed investor interest across meme coin markets Three Solana-native tokens showing strength as ETF momentum builds Five early-stage presales drawing serious attention for their unique positioning One presale—hidden in plain sight—reveals a DAO-powered roadmap that’s turning heads Key takeaways on whether the smarter play […]

news.bitcoin.com Public Filing Shows Trump Raked in $57M in Digital Asset Related Profits

Donald Trump reported tens of millions in income for 2024, including over $57 million tied to cryptocurrencies, according to his newly filed 2025 public financial disclosure. Trump Cashes In Big on Crypto and Name-Related Licensing Deals On June 13, U.S. President Donald Trump submitted his 2025 annual financial disclosure to the U.S. Office of Government […]

bitcoinist.com Snorter Token Presale Reaches $1M in One Month: Best Trading Bot for Meme Degens

The Snorter Token ($SNORT) presale just reached $1M in little over a month, and the score keeps going up, with investors raring for a piece. Snorter Token promotes the Snorter Bot, a Solana-based auto-trading bot that operates in a Telegram chat. But why are people so excited about it? The answer lies in how the […]

bitcoinist.com Bitcoin Volatility Returns As Altcoin Inflows Stay Low – Calm Before The Storm?

Bitcoin has lost momentum after failing to hold above the $110K mark, retracing into the $104K–$105K range following increased geopolitical instability. The escalation of conflict between Israel and Iran on Friday triggered a wave of panic across global markets, resulting in massive long liquidations and heightened selling pressure in crypto. Related Reading: Bitcoin Flashes Early […]

news.bitcoin.com Ethereum Foundation Backs Roman Storm With $500K Ahead of Trial

The Ethereum Foundation has donated $500,000 to support Tornado Cash co-founder Roman Storm’s legal defense ahead of his July trial on money laundering and sanctions charges. Storm, arrested in August 2023, faces accusations of enabling criminals—including North Korea’s Lazarus Group—to launder over $1 billion through the ethereum ( ETH) privacy tool. Privacy advocates argue that […]

bitcoinist.com Strategy’s Inner Circle Is Selling—A Storm Warning For Stockholders?

Microstrategy’s (rebranded to Strategy) board shake‑up took a sharp turn this week as insiders moved to cash in. It’s an unusual sight for a company that’s best known for piling up Bitcoin. Yet director Carl Rickertsen sold every last one of his shares, walking away with more than $10 million. Related Reading: $750 Million Bitcoin War […]

news.bitcoin.com Bitcoin Upward Trend Expected to Continue Through 2025: Coinbase Analysts

Coinbase Institutional forecasts a positive outlook for the cryptocurrency market in the second half of 2025, driven by improved economic growth, corporate adoption, and regulatory progress. Coinbase Report Highlights Three Key Crypto Themes for Second Half 2025 Coinbase Institutional projects a constructive outlook for the cryptocurrency market in the second half of 2025. The analysis […]

news.bitcoin.com Gotbit Ordered to Dissolve After DOJ Seizes $23M in Crypto

The DOJ shut down Gotbit in a sweeping crackdown, seizing $23 million in crypto and exposing years of fake trading volume that misled investors and platforms. DOJ Forces Market Manipulator Gotbit to Shut Down The U.S. Department of Justice (DOJ) announced on June 13 that Gotbit Consulting LLC, a cryptocurrency-focused financial firm based in Russia […]

bitcoinist.com Time To Long Bitcoin? Market Expert Reveals When $600,000 BTC Will Happen

Bitcoin is still trending above $100,000 despite the market crash triggered by the Israel-Iran war, but it has yet to dissuade investors from expecting higher prices. One of those who has called for higher prices is crypto market expert Ansem, who has called for higher Bitcoin prices. He lists out some major developments that could […]

bitcoinist.com Crypto Bulls See $1 Billion Squeeze as Bitcoin, Altcoins Crash

Data shows the cryptocurrency long investors have suffered a massive beating in the past day as Bitcoin and the altcoins have plunged. Bitcoin Briefly Broke Under $103,000 During The Crash The cryptocurrency market has been shocked in the past day as Bitcoin and altcoins have all gone through a drawdown of some degree. At present, […]

news.bitcoin.com Abra CEO Bill Barhydt Says Crypto Is Replacing the 60/40 Portfolio

Bond performance is in the gutter while bitcoin is reaching all-time highs. Savvy financial advisors are now telling their peers to throw out bonds and replace them with crypto. Abra’s Barhydt Predicts Crypto Will Replace Classic 60/40 Asset Allocation The decades-long rule of thumb for diversifying assets in a client portfolio by allocating 60% of […]

bitcoinist.com No ‘Easy Street’: CFTC Acting Chair Shares New Crypto Approach Under Trump Admin

In a recent interview at Coinbase’s State of Crypto Summit, the Commodity Futures Trading Commission (CFTC) Acting Chair shared the future of the agency’s crypto regulation under the pro-industry administration. Related Reading: A ‘Threat To Privacy’? US Senators Question Meta’s Stablecoin Plan In New Letter CFTC Won’t Criminalize Crypto On Thursday, CFTC’s acting chair, Caroline Pham, […]

ambcrypto.com Polkadot's Threshold Bitcoin plan under fire: 'Long-term thinking' or 'garbage'?

Polkadot proposes converting 500,000 DOT into Bitcoin via tBTC for treasury diversification. Community debates plan amid DOT price slump and delayed SEC decision on Polkadot ETF. Polkadot [DThe post Polkadot's Threshold Bitcoin plan under fire: 'Long-term thinking' or 'garbage'? appeared first on AMBCrypto.

themerkle.com FTX and Alameda Continue Monthly SOL Transfers: $31.5M in Solana Moved to 30 Addresses

In a pattern that has now become established, the FTX wallet addresses, along with those tied to the sister trading firm Alameda Research, have executed another major Solana (SOL) transfer. At 10 a.m. EST, exactly seven hours before press time, they moved 188,000 SOL worth $31.5 million to 30 different wallets. This movement, which is now occurring on a fixed schedule, appears to be a liquidation of SOL that the two firms hold. Blockchain analysts and on-chain data trackers have observed that this is not a singular occurrence. Since the bankruptcy proceedings commenced, FTX and Alameda-associated addresses have displayed the The post FTX and Alameda Continue Monthly SOL Transfers: $31.5M in Solana Moved to 30 Addresses appeared first on The Merkle News.

themerkle.com Global Markets Reel as Israel Strikes Iran, Killing IRGC Commander Hossein Salami

Worldwide financial markets were thrown into chaos after tensions in the Middle East escalated dramatically, as Israel directed a large-scale military operation aimed at Iran. The Iranian nuclear program and military targets were the focus of an apparent attempt to “eliminate the Iranian nuclear threat” that involved dozens of Israeli Air Force strikes, coordinated with ground assaults by elite infantry units. The operation’s results are hard to judge, as the press has been aiming mostly at shielded targets: among those hit in Iran’s chaos were forces in the IRGC, the senior commander of which, Hossein Salami, is apparently a casualty The post Global Markets Reel as Israel Strikes Iran, Killing IRGC Commander Hossein Salami appeared first on The Merkle News.

bitcoinist.com Bitcoin Rally Not Yet Euphoric? Puell Multiple Suggests More Upside

Despite a recent slump in Bitcoin (BTC) price driven by rising geopolitical tensions in the Middle East, overall market sentiment remains positive, with the leading cryptocurrency still trading in the mid-$100,000 range. Further, a key on-chain indicator suggests that the current BTC rally could still have more room to run. Bitcoin Puell Multiple Suggests More […]

bitcoinist.com Coinbase Predicts Crypto Surge in 2025, But Leverage May Be the Time Bomb

The outlook for the crypto market in the second half of 2025 remains constructive, according to Coinbase Institutional, which highlights a mix of macroeconomic trends, improving regulatory clarity, and increasing corporate involvement as key tailwinds. The firm’s report, authored by David Duong, Global Head of Research at Coinbase Institutional, outlines conditions favorable for further growth […]

news.bitcoin.com Binance Freezes $3.5M in Crypto as Kidnap Ransom Trail Collapses on Blockchain

Binance froze assets, traced blockchain trails, and helped crack a cross-border ransom-for-crypto network as it dismantled a $3.75M laundering ring hiding in casinos. Binance Neutralizes Crypto Laundering Hub Hidden in Junket-Casino Labyrinth Crypto exchange Binance revealed on June 13 that its Financial Intelligence Unit (FIU) supported Philippine law enforcement in dismantling a sophisticated kidnapping-for-ransom operation […]

ambcrypto.com $3B in Bitcoin Options expire today – Will it trigger more crypto carnage?

$3.04 billion in BTC Options expired with a Max Pain Price of $107K and a Put/Call Ratio of 0.95. Spot and ETF inflows totaled over $1B in three days, but failed to trigger a bullish reversal. The post $3B in Bitcoin Options expire today – Will it trigger more crypto carnage? appeared first on AMBCrypto.

bitcoinist.com Bitcoin As World Reserve? Coinbase CEO Says It’s Inevitable

Coinbase co-founder and chief executive Brian Armstrong used the company’s annual State of Crypto Summit on 12 June to advance his most ambitious thesis yet: that Bitcoin could ultimately displace the US dollar as the planet’s reference asset. “Bitcoin could be the reserve currency of the world,” Armstrong wrote on X as he retweeted a […]

news.bitcoin.com Silver and Platinum Break out as Dollar Hedge Game Shifts

Silver and platinum are exploding higher as investors rotate out of gold, triggering a powerful surge fueled by dollar weakness, soaring ETF inflows, and tightening industrial supply. Silver and Platinum Prices Soar With US Debt Mounting and Demand Tightening Silver and platinum rallied sharply in June as investors diversified away from gold amid rising concerns […]

news.bitcoin.com Coinbase Rallies Behind 2 Landmark Crypto Bills—52M US Owners Await Congress

Coinbase’s CEO is driving urgent action behind two landmark crypto bills that promise regulatory clarity, investor protection, and explosive growth for America’s digital asset future. Coinbase Urges Legislative Action on 2 Crypto Bills: ’52 Million American Crypto Owners Are Counting on It’ Cryptocurrency exchange Coinbase (Nasdaq: COIN) renewed its call for Congress to establish clear […]

bitcoinist.com Can The Shiba Inu Developer Push SHIB Price To $0.01? Expert Responds

The vision of Shiba Inu (SHIB) reaching $0.01 has long been a carefully nurtured dream within its community—one rooted in both hope and strategic belief. Supporting this vision, a crypto market expert is convinced that Shiba Inu could ultimately reach the $0.01 bullish target. However, the catalyst behind this explosive price increase reportedly involves the […]

news.bitcoin.com Trump Media Announces SEC Declares Bitcoin Treasury Filing Effective

Trump Media is unleashing a groundbreaking bitcoin treasury arsenal with SEC clearance, fueling an aggressive multi-billion-dollar expansion across fintech, media, and decentralized finance dominance. Trump Media’s Bitcoin Treasury Deal Turns Real as SEC Declares Filing Effective Trump Media and Technology Group Corp. (Nasdaq, NYSE Texas: DJT) announced June 13 that the U.S. Securities and Exchange […]

bitcoinist.com Bitcoin Flashes Early Buy Signal? – Advanced UTXO Ratio Drops Sharply After Local Peak

Bitcoin faced intense selling pressure following renewed geopolitical tensions in the Middle East, as Israel launched a preemptive strike on Iran. The news sent shockwaves through global financial markets, triggering a wave of risk-off sentiment and sharp liquidations across major crypto exchanges. BTC dropped over 5% in the aftermath, briefly dipping below key moving averages […]

news.bitcoin.com Ripple and SEC Renew Efforts to Resolve Long-Running XRP Lawsuit

Ripple and the SEC have reignited efforts to end their dispute over XRP, aiming to dissolve the final injunction, unlock $125 million, and cement a long-awaited settlement. Ripple and SEC Push Court to Finalize XRP Case, Dissolve Final Injunction and Free Escrowed Funds The U.S. Securities and Exchange Commission (SEC) and Ripple Labs Inc. jointly […]

news.bitcoin.com Fidelity Files S-1 With SEC, Aiming to Launch Spot Solana ETF

Fidelity Investments is officially seeking the green light to launch an exchange-traded fund (ETF) that would hold solana ( SOL) directly. S-1 in Play: Fidelity Takes Aim at Solana With ETF Proposal On June 13, 2025, the firm submitted its S-1 registration statement to the U.S. Securities and Exchange Commission (SEC). The proposed “Fidelity Solana […]

bitcoinist.com $750 Million Bitcoin War Chest: Pompliano Prepping Mega Crypto Fund

Anthony Pompliano is set to lead a new Bitcoin investment outfit that plans to raise $750 million. His move comes as big sums flow back into crypto under a friendly White House. Investors are watching closely. Related Reading: Crypto Kidnapping Case Widens As French Police Make New Arrests Pompliano Steps In With Big Target According to […]