Most people don't know what the volume profile visible range is but it is very useful for understanding large spikes down and up in markets.
Essentially it measures areas where, historically, there has been high and low levels of trading volume. The larger the yellow lines to the right the more volume in that price range.
Usually low volume areas get sliced through with big moves, like we can see here. I have highlighted the weak volume area that was sunk and then supported as the volume increased.
This is also why we get very sharp rebounds as the support/resistance works both ways.
Essentially it measures areas where, historically, there has been high and low levels of trading volume. The larger the yellow lines to the right the more volume in that price range.
Usually low volume areas get sliced through with big moves, like we can see here. I have highlighted the weak volume area that was sunk and then supported as the volume increased.
This is also why we get very sharp rebounds as the support/resistance works both ways.