Video lesson · SignalsAbsorption: how to read and use it
Order flow absorption — where large resting orders absorbed the market flow. The lesson takes 2:10; its full text is below the video.
Narrated in Russian. English subtitles are on by default.
Absorption in short
What does Absorption show?
Marks the moments when a large flow of market orders ran into a wall of limit orders and the price did not move: the opposing wall took the whole volume.
How to read Absorption?
- A green circle: sellers hit the market hard, the bid wall absorbed their volume and the price did not fall.
- A red circle: buyers hit the market hard, the ask wall absorbed their volume and the price did not rise.
- The amount in the label is the absorbed market flow. The larger the circle, the larger the amount.
- Click a circle for details: which side was pushing, how strong the flow was, the wall's price and size, and how long it had been in the book.
- In “All exchanges” mode, the rings around a circle show how many exchanges saw it in the same minute.
How to use Absorption?
- A green circle at a low: a large buyer stops the sellers, the level is being held.
- A red circle at a high: a large seller stops the buyers and caps the price.
- Several circles of one color in a row at one level: the wall keeps refilling and is hard to break. If the price gets through the level after them, the move usually accelerates.
- Use it with Wall Events and Liquidity Map: they show the wall itself before and after.
What do you often see on Absorption?
- A run of same-colored circles at one level means the wall is being refilled; if price still breaks through, the move usually speeds up.
- Absorption does not promise a reversal: the next wave of orders can eat the wall.
- A circle with rings from several exchanges carries more weight than a single-exchange one.
- Large players sometimes showed absorption only after a move against them, so one event is not a buyer's footprint.
Where can I find Absorption?
In the Liqwall terminal: the Indicators button, the Signals section, Absorption. The “Open in the terminal” button on this page opens the chart with it already added.
Lesson text
0:00What Absorption is
The market is pushing, but the price stands still. So someone is taking all the volume. Absorption shows such spots on the chart. These are absorption points.
0:10How to add Absorption to the chart
Press the Indicators button, open the Liqwall list and type Absorption in the search. The indicator has no separate panel. Circles appear right on the price chart.
0:21How to read Absorption
A green circle means sellers pushed with market orders, but a buy wall took all the volume, and the price did not fall. A red circle means buyers pushed, but a sell wall took everything, and the price did not rise. The label by the circle is the absorbed flow, and the bigger the circle, the bigger the sum. Click a circle to open the details: who pushed, how hard, at what price the wall stands, how big it is and how long it has been there.
0:48Absorption settings
In the Exchange setting you can pick one exchange or all at once. In all-exchanges mode rings appear around the circle — that many exchanges caught the absorption in the same minute. Such circles carry more weight.
1:01An example on a real chart
An example. Bitcoin. 15-minute timeframe. October 11.
All day the price stands near 83 thousand, and sellers push down again and again. Look: at a quarter to two, at two, at half past four and at a quarter past five — 4 green circles at one price. Around 82,960. We click a circle.
Under the price stands a buy wall of almost 30 million dollars, and it has been there for several hours. It takes every hit from the sellers in full. At 6 p.m. the pressure ended, and within 3 hours bitcoin rose to 84,180 dollars.
1:41What to pair Absorption with
Keep Wall Events next to it — there you see the wall itself before and after the absorption. Liquidity Map will show how long it stood. And Key Levels will tell you whether the absorption coincided with the previous day's high or low. Several circles of one color at one level are a sign that the wall is being refilled.
2:03The takeaway
Look for places where there is pressure but no movement.
Add the indicator to the chart and look at it on your own coin.Free account — no card needed.