Who this is for — Anyone who sees high volume and assumes directional continuation. Absorption means someone is «eating» flow without giving price ground.
Absorption occurs when heavy aggressive volume (e.g. market sells) arrives but price does not progress as expected — passive orders on the other side take it all. In Wyckoff terms: effort vs result.
In plain terms — They «eat» the sells without yielding ground. Often hidden strength or setup for reversal — read with delta and order flow.
How to recognise it
- High aggressive volume and delta on bar or cluster
- Range/price barely changes vs expectation
- Order flow: aggressive prints into level with little progress
- Often near support/resistance or volume profile POC
Typical mistake — Every absorption = guaranteed reversal — may be pause before another wave same direction.
Example — Price tests 100.00 three times with growing negative sell delta but closes above 99.90: passive bids absorb — possible bounce setup if structure breaks confirm.
Summary card
- What it is: aggressive volume absorbed by passive counterparty.
- What changes: signals potential exhaustion or hidden strength.
- Quick check: effort ↑ result flat?