Back to Glossary
Market StructureA
Absorption
A phenomenon in order flow where aggressive buyers or sellers are being absorbed by passive limit orders on the opposite side. The price doesn't move despite high volume, indicating strong opposing interest at that level. Traders watch for absorption as it often precedes a reversal, since the aggressive side eventually exhausts its orders while the passive side holds firm.
Example
“Heavy absorption at the bid was visible on the footprint chart, suggesting institutional buyers were defending that price level.”