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 initiative buying imbalances.
- The auction at the top is unfinished and must be revisited.
- Retail buyers have exhausted themselves and the market is thin at the top.
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