Understanding Volume Profile (PART 2): The Value Area Edge

(Missed Part 1? Check my previous post for POC and HVN/LVN fundamentals)

Last day I covered the basics. Now here's the advanced concept that reveals institutional positioning and breakout probabilities:

The Value Area: Where 70% of Business Happens

VA Boundaries Define the Battlefield
Value Area shows where 70% of volume traded - the range institutions consider "fair." VAH (Value Area High) and VAL (Value Area Low) mark these boundaries.

Visual cue: The VA area is highlighted while everything else dims out. This isn't random - it's showing you the market's consensus on fair value.

Breakout Signal Recognition:

Multiple Closes Outside VA = Momentum
When $BTC closes above VAH for several sessions, it signals institutional money is willing to pay premium prices. That's your breakout confirmation.

Rejection patterns matter too: When price hits VAH but gets rejected back into the VA, it often returns to POC or the next major HVN below.

Real example: $SOL spent weeks grinding at its VAH around $180. When it finally broke above with multiple daily closes, that confirmed the move to $220+.

How to Draw VPs Effectively:

Fixed Range for Specific Periods
Draw separate Volume Profiles for range-bound periods vs expansion phases. Each tells a different story about market behavior.

Session vs Variable Range
Variable range maps to your current timeframe automatically. I use both - session VPs for intraday context, variable for longer-term positioning.

Pro tip: Always keep previous POCs mapped out. When price breaks out and retests old POC levels, those often become strong support/resistance.

The combination of VA analysis with POC levels gives you institutional roadmap for where price wants to go next.

Which Volume Profile timeframe works best for your trading style?

#TechnicalAnalysis #InstitutionalFlow