medium · Order Flow Analysis absorption-exhaustion-imbalance
What does a 'Top-Heavy' bar (R_top < 0.50) with a bearish close typically indicate to an order flow practitioner?
- An institutional seller was 'capping' the top, absorbing aggressive buying at the extreme.
- Price is being driven higher by strong, sustained initiative buying imbalances.
- The auction at the top of the range is unfinished and must be revisited soon.
- Retail buyers have exhausted themselves, leaving the market thin and illiquid at the top.
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