DEV Community

Cover image for Build Smarter Crypto Signals with VWAP Radar (Using DropsTab API)
krisvarley
krisvarley

Posted on

Build Smarter Crypto Signals with VWAP Radar (Using DropsTab API)

Crypto prices are chaotic. One minute you're chasing a pump; the next, you're underwater.

That’s why volume matters—and why VWAP (Volume-Weighted Average Price) is a powerful tool for cutting through the noise.

In this post, I’ll show you how to:

  • Understand the VWAP Score
  • Access it through the DropsTab API
  • Use it to spot overheated or undervalued tokens
  • Integrate it into alerts, bots, or dashboards

🔍 What is VWAP Score?

VWAP Score tells you how far a token's price has moved from its fair value, based on trading volume.

Formula:


math
VWAP Score = ((Current Price – VWAP) / VWAP) × 100

Interpretation:
    • +100 → Extremely Overvalued (likely top)
    • +50 to +99 → Overheated
    • –50 to –99 → Undervalued
    • –100 → Deep Panic (may bounce)
    • 0 → Neutral / Fair value


🔌 Accessing VWAP Score with DropsTab API

First, sign up and get your API key here.

Example: Fetch VWAP Score for BONK

const response = await fetch('https://api.dropstab.com/vwapRadar?token=BONK&window=7d', {
  headers: {
    'Authorization': 'Bearer YOUR_API_KEY'
  }
});

const data = await response.json();
console.log(data.score); // Output: e.g., -89.34

You can adjust window to:
    • 7d (short-term)
    • 1mo (medium-term)
    • 3mo (longer trend)

**How to Use VWAP Score in Your App**

1. Contrarian Alerts (panic or hype zones)

if (score <= -70) {
  alert("🔥 Possible dip-buy opportunity");
}

if (score >= 80) {
  alert("⚠️ Token looks overheated");
}

2. Trend Confirmation (VWAP crossover logic)

If the score crosses from negative to positive over time → potential bullish momentum. Vice versa for bearish.

3. Multi-Timeframe Logic

Compare 7d vs 3mo scores to spot:
    • Short-term dips in long-term bullish trends
    • Overbought signals in weakening trends

Use Cases
    • Trading bots: trigger buy/sell alerts based on extremes
    • Portfolio dashboards: surface tokens farthest from fair value
    • Alpha scanners: visualize undervalued tokens across markets


Quick Dev Checklist
    ✅ DropsTab API Key
    ✅ VWAP endpoint integrated
    ✅ Custom thresholds set
    ✅ Optional combo with RSI / Bollinger Bands / On-chain metrics

Example: BONK at –89, Then Bounce

Last week, BONK’s VWAP Score hit –89 (7-day window). That’s deep panic territory. It rebounded +20% in 48 hours.

Another token, PUMP, hit +100 → dumped shortly after.

VWAP Score gave both signals in real-time.


Try It Yourself
    • Docs: https://api-docs.dropstab.com
    • Dashboard: https://dropstab.com/tab/vwap
    • API: /vwapRadar

Let me know in the comments if you build something on top of it — would love to see what you make.
Enter fullscreen mode Exit fullscreen mode

Top comments (0)