hard · Order Flow Analysis absorption-exhaustion-imbalance
Cumulative volume delta (CVD) is making a higher high while price makes a lower high at a resistance retest. Simultaneously, the footprint at the new CVD high shows aggressive buying (ask imbalances) but each successive up-attempt prints a smaller range than the last.
What does this combination most precisely indicate?
- Aggressive buyers are increasingly committing (rising CVD) while a passive seller absorbs them so price can't make a higher high, and the shrinking up-ranges show buyer effort yielding diminishing result — absorption building toward exhaustion
- CVD diverging above price is a bullish accumulation signal, so the lower high in price is a bear trap and a breakout higher is imminent
- The smaller ranges mean volatility is contracting before an expansion, so direction is undefined and CVD divergence should be ignored
- Price made a lower high because buyers stepped away; the rising CVD is stale data lag and does not reflect current order flow
Sign up free to see the explanation and track your rank →
More Order Flow Analysis absorption-exhaustion-imbalance practice
- What market phenomenon is occurring?
- Where is the most structurally sound place to put the stop loss for a short entry?
- A trader is analyzing a bar in the 10-Year Treasury (ZN). Th… — What does this suggest?
- During the first 30 minutes of the RTH session, the E-mini S… — If the price breaks above
- Where should the entry and stop be placed?
- The treatise mentions a 'Self-Reinforcing Feedback Loop' reg… — What does this mean for pr
- According to the structural stop-placement guide, where should the stop be placed if enter
- A market opens with a 10-point gap up. In the first 15 minutes, the footprint shows heavy