Volume-Weighted Average Price (VWAP) is a trading benchmark used to indicate the average price at which a cryptocurrency has been traded over a specific period, weighted by trading volume. It helps traders assess the price direction and market conditions more accurately than a simple average.VWAP is calculated by taking the total dollar amount traded over a certain timeframe and dividing it by the total volume of shares or units traded during that same period. This makes VWAP particularly useful for identifying trends, as it reflects the price level at which most transactions occurred.Traders often use VWAP to make buy or sell decisions. Prices above the VWAP may suggest a bullish trend, while prices below it can indicate a bearish trend. Additionally, institutional traders might rely on VWAP to execute large orders without significantly impacting the market price. By comparing current prices to the VWAP, traders can gauge whether the asset is overvalued or undervalued, helping inform their trading strategies.