What Is Absorption Versus Exhaustion?
Absorption and exhaustion may look similar, but they describe different behaviours.
Absorption: Aggressive orders continue entering, but passive liquidity prevents price from moving significantly.
Exhaustion: Aggressive participation weakens, and fewer traders continue pushing price in the same direction.
Why does the difference matter?
Because absorption involves opposing liquidity meeting aggression, while exhaustion involves declining aggression.
Learn to identify what is actually stopping the move.
Which concept do you find harder to identify?
