medium · Volume Profile Analysis profile-anatomy
A trader identifies a support/resistance flip setup. A prior POC at $1.2500 was broken to the downside. Price now rallies back to $1.2500.
Why does this level often reject price to the downside?
- The level acts as a fixed 'magnet' that price keeps rotating around.
- Institutional buyers treat the broken level as a discounted long entry point.
- The ATR has compressed sharply, which turns $1.2500 into a 'Low Volume Node'.
- Underwater longs sell at break-even and new shorts enter at the level.
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