Crypto glossary
Volume profile
Volume profile is a chart study showing how much trading volume occurred at each price level, highlighting the value area and the point of control.
A normal volume bar shows how much traded in each time period. Volume profile turns that sideways and shows how much traded at each price over a chosen range, drawn as a horizontal histogram. The price with the most volume is the point of control (POC), and the band containing roughly 70% of the volume is the value area, bounded by the value area high and low.
Traders read high-volume nodes as prices the market accepted, which often act as support or resistance when revisited, and low-volume nodes as prices the market moved through quickly, which price tends to cross fast again. In crypto, volume profile is popular for mapping ranges on bitcoin and large altcoins and is often combined with VWAP and order flow tools.
The result depends on the data feed and range selected. Profiles built from a single exchange show only part of a market spread across many venues, and the levels are zones of interest, not guarantees of a reaction.
Example
After a month ranging between 2,800 and 3,400 dollars, ETH's volume profile shows a point of control at 3,050. When price falls back to that level, buyers absorb the selling as they did before.