Absorption

What is Absorption?

Absorption is what happens when aggressive orders pour into a price level and the level holds anyway: resting passive orders take everything thrown at them, so volume prints heavily while price makes little or no progress. It is effort vs result concentrated at a single level. In Wyckoff terms, it is how large interests build or unload positions without moving the market against themselves: absorbing supply near the top of a base before markup, or absorbing demand under a top before markdown.

On a chart, absorption looks like repeated pushes into the same level on elevated volume that keep failing to break it, often with narrow-range bars or long wicks at the contact point. Order-flow tools make the mechanic explicit: volume delta or footprint views showing heavy aggressive volume with no price displacement. The read is confirmed only in hindsight: if the absorbing side has taken all it wants, price typically leaves the level quickly, and if the level instead breaks with follow-through, the aggressive side won.

How traders use it

• To grade level strength: when sellers repeatedly hit a support zone on heavy volume and it refuses to break, the failed effort marks the zone as actively defended rather than passively hoped for. Stopping volume at the lows is the classic Wyckoff example.
• Inside trading ranges: Wyckoff readings look for supply being absorbed in the later phases of accumulation, visible as rallies that hold more ground while dips shrink, as evidence the range is nearing resolution.
• As a trap warning: absorption of breakout buying just above a broken high, seen as heavy volume with no continuation, often precedes the failure of that breakout.