Absorption
Identify when aggressive orders are being absorbed at a level.
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Absorption occurs when aggressive orders hit the market but price does not move as expected. For example, buyers may keep lifting offers near resistance, yet price fails to break higher because a larger seller is absorbing that demand.
This can signal that one side is spending energy without gaining ground. If aggressive buyers cannot move price up, a downside reversal may follow. If aggressive sellers cannot push price lower, an upside reversal may follow.
Absorption is easiest to misuse when viewed in isolation. Look for it at meaningful levels, after a liquidity event, or near session extremes. Then wait for price to confirm by moving away from the absorbed area.