Volume profile (POC, VAH, VAL)
A volume profile spreads the volume traded over a chosen period by price instead of by time. It is drawn as horizontal bars beside the chart. The price with the most trading is the POC, and the range holding most of the volume is the value area (between VAH and VAL).
What is a volume profile?
Ordinary volume bars sit under each candle and show how much was traded at what time. A volume profile adds up the same trades by the price they took place at. The price axis is split into equal rows, and the volume traded in each row is shown as a horizontal bar.
A profile is always worked out for a chosen period: a day, a week, the range visible on screen, or a start and end picked by hand. Crypto trades 24/7, so there is no exchange session; daily profiles are usually split by the UTC day.
Key terms
- POC (point of control): the price row where the most volume traded in the chosen period.
- Value area: the price range built outwards from the POC in both directions until it holds a set share of total volume. The common setting is 70%.
- VAH (value area high) / VAL (value area low): the upper and lower edges of the value area.
- High volume node (HVN): a clearly thick part of the profile; where price traded for a long time.
- Low volume node (LVN): a thin part of the profile; where price moved through quickly and little was traded.
70% is not a rule but a common setting that comes from tradition. Platforms can differ slightly in the order they add rows when building the value area, so the VAH and VAL of the same period may not match exactly on two platforms.
How to read it on a chart
- Choose the period. Decide which period the profile covers. Changing the period can change the POC and the value area completely.
- Find the POC and the value area. The longest row is the POC. VAH and VAL show the price range where most of the volume gathered.
- Mark the nodes. Thick parts are ranges where price was accepted; thin parts are ranges price moved through quickly.
- Look at where price is now. Whether price is trading inside, above or below the value area tells you where it stands relative to the chosen period.
Price and the value area
Price's position relative to the value area is usually read as follows. Each is a tendency, not an outcome.
Price above the value area
Price is trying to find acceptance above the range where the period traded most. It can be read as the value area possibly shifting higher.
Price inside the value area
Price is in the range where it traded for most of the period. Moves here often turn sideways and slow down around the POC.
Price below the value area
Price is trying to find acceptance below the range where the period traded most. It can be read as the value area possibly shifting lower.
What it shows, what it does not prove
What it shows
- At which prices more, and at which less, was traded in the chosen period
- The ranges where price stayed for a long time and those it moved through quickly
- Where price stands now relative to that period
What it does not prove
- That price will return to the POC or the value area
- That a high volume node will draw a reaction next time price gets there
- The volume distribution of the whole market; a profile is worked out from one exchange or data source
The MarketLevelMap view
How it relates to zones
High volume nodes often line up with ranges where price traded sideways for a while. Support and resistance zones often form at the edges of those ranges too. A zone lining up with a volume node is extra information that those prices saw heavy trading in the past.
A profile shows price ranges, not single lines either: a node is as thick as a band. So it is sounder to read the POC or a node not as a single price but as a band, the same way as zones.
Often confused with
For general information only. Not investment advice.Last updated: