In technical analysis, volume is a core indicator for gauging market activity. The traditional volume chart, located below the price chart, clearly reveals the intensity of trading within specific time periods, such as hourly or daily. However, this method does not directly answer a deeper question: at which price levels were trades concentrated during these active periods?
To fill this informational gap, the Volume Profile was developed, and the VPVR (Volume Profile Visible Range) is one of its most intuitive applications. VPVR fundamentally shifts the perspective; it no longer displays volume along the time axis but instead plots it horizontally on the price axis. You can envision it as a horizontal bar chart overlaid on the side of the candlestick chart, where the length of each horizontal bar precisely represents the total volume transacted at the corresponding price level.
The essence of this method lies in shifting the analytical focus from "when the market is active" to "what price levels the market is most interested in." Areas with long bars are high-volume nodes where the market has reached a "value consensus," often forming solid support or resistance. Conversely, areas with short bars are low-volume "value vacuums" that the market moves through quickly. Through this intuitive map of market structure, VPVR reveals the focal points of the battle between bulls and bears and the true areas of value hidden behind price fluctuations.
VPVR Overview
VPVR is not a single indicator but a comprehensive analytical framework composed of several key data points. It gives "depth" and "thickness" to an otherwise flat price chart by quantifying trading activity at every price level, thereby revealing the market's internal structure. In the cryptocurrency market—characterized by 24/7 trading, high volatility, and deep involvement of algorithmic and bot trading—understanding this volume-defined market structure is particularly crucial. The following are the four core elements that constitute VPVR.
Point of Control (POC)
The Point of Control (POC) is the most prominent and central element of the VPVR chart. On the chart, it is represented by the price level corresponding to the longest horizontal volume bar. Statistically, the POC is the single price level with the highest traded volume within the visible K-line range.
The POC represents the market's "center of gravity" or "point of maximum consensus" for that period. It is not simply a high or a low, but rather the price where buyers and sellers engaged in the most intense and frequent battle, ultimately resulting in the largest scale of value exchange. The POC can be understood as the market's "fair value hub," the position where bullish and bearish forces reached their most balanced state during that timeframe. Its formation signifies that the vast majority of market participants recognized and accepted this price, willing to conduct large-scale transactions there.
Value Area (VA)
The Value Area (VA) is not a single point but a price range. It refers to the core zone within the visible range where the vast majority of trading volume was concentrated. By industry standard, the Value Area is typically defined as the price range that contains 70% of the total trading volume (this percentage is adjustable on most platforms, with 68% also commonly used to align with the concept of one standard deviation in statistics). The top of this area is called the Value Area High (VAH), and the bottom is called the Value Area Low (VAL).
If the POC is the "value core" of the market, then the VA is its "comfort zone" or "main battlefield." This area is the primary ground where major market capital, institutional investors, and the majority of traders establish, close, and exchange positions. The price tends to spend most of its time fluctuating and consolidating within the Value Area because liquidity is abundant and trading is active, representing a widely accepted value range by the market. The VAH and VAL form the boundaries of this "comfort zone" and are critical thresholds where the market transitions from balance to imbalance.
High Volume Node (HVN)
A High Volume Node (HVN) refers to an area on the VPVR chart, aside from the most prominent POC, where volume is also relatively concentrated. Graphically, they appear as local "peaks" or "plateaus." A complete VPVR profile might contain one primary POC and several secondary HVNs.
Each HVN represents a historical "high-traffic area" or "balance area." These are zones where the price has previously lingered for an extended period, allowing for thorough turnover. Because a large volume of trades occurred here, it means a significant number of market participants established positions at these levels, concentrating their cost basis. Consequently, when the price returns to these HVNs in the future, it will encounter strong support or resistance. Holders may choose to close or add to their positions near their cost basis, causing price movement to slow, stall, or even reverse within this zone.
Low Volume Node (LVN)
A Low Volume Node (LVN) is the opposite of an HVN. It is an area on the VPVR chart where trading volume is very sparse, appearing graphically as distinct "valleys" or "dips."
LVNs represent the market's "value vacuums" or "imbalance areas." The reason trading volume is scarce in these price zones is that market participants generally deemed these prices "unfair," leading to one side (buyers or sellers) achieving absolute dominance and allowing the price to move through the area quickly and without resistance. There has been no significant turnover here, and therefore, few traders have positions established at these levels.
The trading implication of LVNs is that they offer almost no effective support or resistance. When the price enters an LVN, its velocity tends to accelerate significantly, as if moving through a vacuum, until it encounters the next High Volume Node (HVN). Therefore, LVNs often form channels for sharp price movements. The common trader's phrase "filling the gap," when viewed from a volume profile perspective, is essentially the process of the price traversing an LVN.
How to Analyze the Market Using VPVR?
The most direct application of VPVR is to identify support and resistance levels that are more meaningful than traditional horizontal lines. The Point of Control (POC) and High Volume Nodes (HVNs) are natural, strong support/resistance zones because these price levels are historical high-traffic areas, representing the cost basis for a large volume of orders. When the price retests these zones, it often slows down or reverses due to the behavior of existing holders who are reluctant to sell at a loss or eager to sell at breakeven. Similarly, the Value Area High (VAH) and Value Area Low (VAL) act as dynamic boundaries, and the price is typically tested near them. A classic trading strategy involves observing the market's reaction when the price returns from outside the Value Area to test the VAH or VAL. If signs of rejection appear, it could signal a mean reversion opportunity, with the POC as the likely target.
VPVR also helps us determine whether the market is in a state of balance or imbalance. When the price consolidates sideways within a Value Area for an extended period, fluctuating around the POC, the market is in a balanced state, which is suitable for range trading strategies. Conversely, when the price decisively breaks out of the current Value Area and begins to establish a new one outside the old range, the market enters an imbalanced state, which marks the beginning of a trend. For example, in the cryptocurrency market, if the price breaks above the VAH, successfully retests the VAH as support on a pullback, and then forms a new POC above it, this is a strong bullish signal, indicating that the market has accepted a higher value.
By identifying Low Volume Nodes (LVNs), traders can anticipate the path of least resistance for price movement. LVNs act like "highways" connecting two HVNs. Once the price breaks through one HVN, its next probable target is the next HVN, with the LVN in between representing potential profit space. For instance, after the price of Bitcoin breaks out of an HVN that was formed over weeks of consolidation, a trader can look for the next significant HVN above it. The wide LVN between them implies that there is little resistance to an upward move, and the price action may be swift. This provides a clear basis for setting profit targets.
