By Marco BösingWhat Is an Exhaustion?
An exhaustion occurs when a price movement loses momentum even though price continues in the same direction. The aggressive volume that drove the movement progressively declines — the market participants who pushed price are running out of steam.
In the footprint chart, an exhaustion typically shows as declining delta values while price continues moving. The CVD flattens or diverges from price. Unlike an absorption, where active resistance is being offered, an exhaustion simply lacks the force for continuation.
Exhaustions frequently occur at the end of trends or impulsive moves and, together with absorptions, rank among the most important reversal signals in order flow trading.