Absorption happens when one side pushes hard — heavy volume, aggressive orders — but price barely moves. The pushing side's orders are being soaked up by large resting orders on the other side, like waves breaking on a sea wall that does not shift.
The mechanism matters. If sellers hit the market with size and price refuses to fall, a large buyer is absorbing that selling, filling their position against the pressure. Once the sellers exhaust themselves, there is little left to stop price rising — which is why absorption often precedes a turn.
How to spot it
Look for a cluster of high-volume bars at a level where price stops making progress — repeated pushes into support or resistance that fail to break it. On lower timeframes this shows as large volume with tiny candle bodies stacking up at one price.
- Heavy volume with stalled price is the signature of absorption.
- It shows a large passive order soaking up aggressive flow.
- It often clusters at a key support or resistance level.
- When the aggressive side exhausts, price can turn sharply.
Absorption is a clue, not a signal. It tells you a battle is underway at a level, but the absorbing side can still fail. Wait for price to actually reject the level and confirm before trading the anticipated reversal, with a stop beyond the absorption zone.
Absorption is heavy volume meeting a wall of resting orders — when the aggressors run out, the stalled price can reverse hard.