LEARN POSITIVE VOLUME INDEX (PVI) IN 3 MINUTES —— BLOCKCHAIN 101

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In the previous lesson, we covered the NVI indicator — Negative Volume Index — used to track what prices are doing when volume shrinks. In other words, NVI watches: who’s buying when it’s quiet.

In contrast, today’s lesson is about PVI, which stands on the other side: what happens when the market starts to get noisy?

If we say:

NVI = the footprints of smart money
Then PVI = the footsteps of emotional capital
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What is PVI

The Positive Volume Index (PVI) is designed with a very restrained logic: it only updates in one case — when today’s volume is higher than yesterday’s.

The rule is simple:

Volume expands → PVI changes
Volume does not expand → PVI stays unchanged

The implicit assumption of PVI is: volume surges often signal the entry of more irrational participants.

This is not a criticism — it’s a neutral fact of how markets operate.

What is PVI Really Monitoring?

Unlike NVI, PVI doesn’t try to determine whether a trend is right or wrong. It focuses on just one thing: Is the market becoming dominated by emotion?

Because in most markets, what determines whether prices can continue to rise isn’t just whether the logic makes sense — it’s whether there are still new participants willing to buy at higher prices.

And when volume increases, it usually means those participants are flooding in.

So, think of PVI as an amplifier of emotional participation. It doesn’t amplify price — it amplifies the speed of consensus spreading.

When PVI starts to accelerate, it signals that the driving force behind the trend is shifting: from early structural or long-term capital to short-term, momentum-driven emotional capital.

That doesn’t mean the trend is over — but it clearly tells you one thing: From this moment on, both risk and reward begin to accelerate.

This is also the stage where the market looks more “exciting,” but is also more prone to sharp volatility.

How to Interpret PVI Changes

1. PVI Steadily Rises: The Market is Heating Up

When you observe:

Gradually increasing volume
PVI slope steadily climbing

This typically happens in the early to middle phase of a trend — the narrative is just starting to spark, but hasn’t yet gone mainstream, and new money begins entering tentatively.

A typical sign of this stage: The rise is still logical, but emotions have begun pricing in. The market shifts from “only a few understand it” to “more and more people are starting to notice.”

At this point, you’ll often see:

Pullbacks remain manageable
Down moves happen on lower volume
Up moves start to come with increasing volume

So you’ll hear this very accurate description: It’s still rising, but no longer quiet.

For short-term traders: this is the high-reward phase for trend following and swing trading.
For mid-term traders: this is not a sell signal, but a reminder to review position structure and prepare exit plans.

2. Price Surges + PVI Spikes

This is a classic emotional-driven move. It’s often triggered not by technical changes, but informational catalysts, such as:

A hot narrative being repeated again and again
Influencers sharing in unison
Everyone in the chat group is talking about just one coin

At this stage, the price rally may still be real — but the driving force has clearly shifted from “rational expectations” to “emotional contagion.”

That’s why PVI’s role here is not to tell you whether to chase the rally, but to remind you that the market’s risk structure has changed.

Yes, the rally may continue, it may even accelerate beyond expectations — but you must be clear: From this point forward, pullbacks are no longer just “retracements” — they become emotional unwindings.

And emotional unwindings — usually come without a buffer.

3. New Highs in Price + PVI Flattens or Diverges

This is one of the most important — and most overlooked — PVI risk signals.

Typical signs:

Price is still making new highs
Volume doesn’t look weak
But PVI slope is flattening or going sideways

This means: The emotional money willing to buy at higher prices is decreasing. It’s not that no one’s buying — but new buying pressure is no longer sufficient.

The market often follows one of three paths at this point:

Sharp consolidation at the top, draining patience
Fast pullback, releasing emotions
Sideways distribution, followed by slow decline

So you’ll find the old saying to always be true: Tops are never “sold off” — they happen when buying stops.

And PVI is one of the few tools that lets you sense whether emotion is still accelerating.

It doesn’t predict the top — but it tells you whether the current rally can still be driven further by sentiment.

PVI Must Be Used Together with NVI

Looking at PVI alone only tells you: “The market is hot.”
But combining PVI + NVI lets you answer a more important question:
“Who is driving this market right now?”

Four Classic Combinations Recap:

NVI ↑ + PVI ↑ → Structural funds + emotional funds in sync = strongest trend
NVI → + PVI ↑ → Retail rushing in, smart money not following = watch out for late stage
NVI ↑ + PVI → → Quiet accumulation = not yet explosive, but healthiest
NVI ↓ + PVI ↓ → Funds exiting together = don’t blindly catch the bottom

In crypto markets, knowing “who’s buying” is more important than “will it go up.”