BitcoinVPVR Range - The Bottom Confirmation?
The VPVR range typically measures the volume of the most traded areas.
The red line highlights the highest value area or "the floor" for the "value area". The value area is the bold colours, this demonstrates 70% of all traded volume.
How does this indicator work? The red line is typically tested and considered "support" during bull market cycles... it is considered resistance during bear market cycles.
We have so far tested this as support successfully once. It could happen again but it gives confidence that we are typically returning to the highest value area as part of a macro correction in what is expected to be prolonged long term bull market (no blow off top imo).
The yellow boxes - These have been added to demonstrate the 2 other high value areas above the floor. Although I believe we will have a bull continuation, these 2 areas are crucial in confirming continuation or switching to a bear market.
I would typically expect us to be rejected "once" against each area, set a higher low on the pump and then break through and re-test. This behavior for me will confirm continuation. If we get rejected and return to the floor we will be at serious risk of flipping to bear.
For myself the most important range is $55k+ that will be the most difficult to break through and stay above.
Other Notes: the VPVR typically shows all volume traded within the specific timeframe shown on the graph, so it changes dynamically. I find this helps for a macro understanding and some traders do use VPVR for trading based on high/low volume areas.
Not something I use on the micro but is definitely an interesting indicator to be considered. The lower the vpvr scores the faster price action will move through that range.
The red line highlights the highest value area or "the floor" for the "value area". The value area is the bold colours, this demonstrates 70% of all traded volume.
How does this indicator work? The red line is typically tested and considered "support" during bull market cycles... it is considered resistance during bear market cycles.
We have so far tested this as support successfully once. It could happen again but it gives confidence that we are typically returning to the highest value area as part of a macro correction in what is expected to be prolonged long term bull market (no blow off top imo).
The yellow boxes - These have been added to demonstrate the 2 other high value areas above the floor. Although I believe we will have a bull continuation, these 2 areas are crucial in confirming continuation or switching to a bear market.
I would typically expect us to be rejected "once" against each area, set a higher low on the pump and then break through and re-test. This behavior for me will confirm continuation. If we get rejected and return to the floor we will be at serious risk of flipping to bear.
For myself the most important range is $55k+ that will be the most difficult to break through and stay above.
Other Notes: the VPVR typically shows all volume traded within the specific timeframe shown on the graph, so it changes dynamically. I find this helps for a macro understanding and some traders do use VPVR for trading based on high/low volume areas.
Not something I use on the micro but is definitely an interesting indicator to be considered. The lower the vpvr scores the faster price action will move through that range.