Module 2 · Liquidity Behavior
Absorption vs Exhaustion
Price stalls — but for opposite reasons.
In this lesson you'll
- Distinguish absorption from exhaustion on the heatmap
- Read trade dots and CVD to tell them apart
- Connect both to potential reversals
Both can stall a move, but the cause differs:
- Absorption: aggressive market orders repeatedly hit a large resting wall, but price doesn't move — the passive side soaks up the aggression. The bright band holds; large trade dots pile up right at the level.
- Exhaustion: price stalls because the aggressors run out of fuel — follow-through volume dries up. No defending wall is needed; the dots simply shrink at the extreme.
| Absorption | Exhaustion | |
|---|---|---|
| What stalls price | A large passive wall eats the aggression | Aggressors quit (volume dries up) |
| Volume at the level | High / heavy (big dots) | Low / shrinking (small dots) |
| Heatmap | Bright band holds / refills | No wall needed; dots fade |
Key takeaways
- Absorption = a passive wall eats heavy aggression; high volume, no move (bright band holds).
- Exhaustion = aggressors quit; shrinking volume at the extreme (no wall needed).
- Both can precede reversals; the order-flow signature differs (high vs declining volume).
- Use trade dots + CVD divergence to confirm which is happening.
Check your understanding
Pick an answer to reveal instant feedback. Answer every question to complete the lesson.
Why that's off: Exhaustion shows SHRINKING volume; here volume is heavy.
Why that's off: Spoofing means the order is pulled untouched; here it's being traded into.
Why that's off: A sweep moves through a void; here the wall holds.
High aggressive volume into a holding wall with no price movement is absorption — the passive side is eating the aggression. If CVD diverges (price holds while selling continues), a reversal up becomes likely.
Why that's off: Absorption needs heavy volume against a holding wall.
Why that's off: There's no defending wall in this case.
Why that's off: An iceberg would show heavy refills, not shrinking dots.
Shrinking aggressive volume with no passive wall = exhaustion: the buyers simply quit. Contrast with absorption, which shows heavy volume against a holding wall.
Educational content only. Nothing here is financial or trading advice. Order-flow and options patterns shift probabilities; they never guarantee outcomes.