Bitcoin's Volume Profile: A study of Volume-At-Price Analysis
There are two ways to analyze aggregate volume on a chart. VPA (Volume Price Analysis) and VAP (Volume At Price Analysis). Traditional VPA displays the gross volume traded at a particular time frame via a vertical historgram. The second approach, VAP, is often labeled as a Volume Profile. Depending on how the data is compiled, Volume-At-Price is calculated per tick or is merely a representation of the number of bars/candlesticks that are present at a particular price range. This tool has evolved over the years to include more advanced forms of the Volume Profile such as the Market Profile (Time-Price-Opportunity) - not available on Tradingview. Regardless of the type of VAP used, the principle theory is the same:
Empty spaces (low volume nodes) between high volume nodes behave in a volatile fashion. Think of price moving into these low volume nodes like a vacuum - price gets 'sucked' into and through that empty space swiftly.
And on Bitcoin's chart we can see that price is sitting in a zone that is very close to a swift drop zone through the low volume node below, until it finds support around the 2500-2800 value area.
Empty spaces (low volume nodes) between high volume nodes behave in a volatile fashion. Think of price moving into these low volume nodes like a vacuum - price gets 'sucked' into and through that empty space swiftly.
And on Bitcoin's chart we can see that price is sitting in a zone that is very close to a swift drop zone through the low volume node below, until it finds support around the 2500-2800 value area.
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