Price and Volume Relationship
The interaction of price and volume is one of the most critical parts of crypto trading. The volume profile takes this relationship one step further by showing just how much volume has traded at each price. If volume increases within a particular price level, this notifies you that the participants see the price as a proper value, and you will see consolidation or reversal in such zones.
For example, if Bitcoin has been trading between $40,000 to $42,000 for days, the volume profile could indicate that volume is concentrated around $41,000. That would mean $41,000 is perceived by the market participants as a price close enough to the real value, and this level might serve either as support or as resistance in future trading.
Volume at key price levels depicts exactly where the big players are most active. Many of these price levels show the strong hands of the market, where large sums of capital are placed with conviction. In being able to understand this relationship creates the ability for traders to predict potential breakout or breakdown areas with a much higher degree of confidence.

Volume Profile Compared to Traditional Volume
While traditional volume indicators have their utility and can be used to show just how much activity occurred in a given time frame, they lack depth when it comes to precise analysis. Traditional volume simply shows the total number of assets traded but does not reveal where, in terms of price, the trading took place. This is where Volume Profile excels.
Volume profile gives you an accurate representation of the exact amount of Bitcoin or Ethereum that was traded at every price level. This is important for timing entry and exit points, especially if one is day trading crypto. For example, if the majority of the trading of Bitcoin has taken place at $30,500, then you would know that future price action around that level is likely to encounter any form of buying or selling pressure.
Volume profile analyzes the market in terms of price zones rather than with an exclusive focus on time. It does this by better determining where the liquidity lies, which can help traders make more intelligent decisions by recognizing key price levels. This is the difference between an informed trade based on substantial data and chasing volatile movements that are driven by emotions.
Using the volume profile means that traders are able to see more in terms of the market psychology and are able to estimate better when a possible market reversal, consolidation, or breakout is about to take place.
Key aspects of volume profile:
Point of Control-POC Perhaps one of the most salient features within volume profile analysis has to be what's called the Point of Control, or POC. The POC refers to a specific price level at which a certain amount of volume was traded the most during some predefined period of time. In other words, it was indeed the price level that the market at any given point in time perceived as being most "fair."
The POC acts like a magnet to price action in crypto trading. For example, if the POC of Bitcoin is at $ 45,000 and the current market price is $ 46,000, then most likely, it will revert back to the POC at $ 45,000 because the volume traded at that level was immense. This gives the traders important information about zones of potential reversion or consolidation.
The POC can be used to set stops or entry points. Prices trading below the POC could see resistance, while those above may face support. By extended observation of price action around POC, traders get to know whether the market is ready to undergo a big price movement. Hence, it is an excellent tool for noticing potential breakouts or breakdowns.

Value Area -VA
​The Value Area (VA) shows the range of prices within which 70% of the overall volume of the traded instrument was able to move. It summarizes the most active range of prices, in which a majority of market participants moved. The Value Area is used by traders not just to find zones of high liquidity but also to detect key support and resistance levels.
For instance, if Ethereum's Value Area falls between $3,000 and $3,100, that range then becomes an important area of contention between buyers and sellers. When the price re-enters the Value Area, it is likely to see all kinds of action. If the price is trading above the Value Area and then falls back into the Value Area, this may indicate that the asset is losing momentum and may plummet further. On the other hand, when the price is consistently above the Value Area, that could be interpreted as a sign that the buyers have taken control.
The edges of this Value Area are very useful in establishing breakout points: if the price breaks out above or below the Value Area with good volume, it may be a very good signal for a potential reversal of the trend or its continuance, according to the direction of the breakout.