Skip to main content
Absorption Alpha is one of the most powerful order flow indicators in Cluster Terminal. It identifies price levels where aggressive market orders (buying or selling) are being absorbed by passive limit orders, causing the expected price move to fail. When a large delta occurs at a level but price does not continue in the aggressor’s direction, it reveals hidden institutional supply or demand that is quietly absorbing the pressure.

​
How Absorption Works

In a healthy market move, aggressive buying pushes price higher and aggressive selling pushes price lower. Absorption occurs when this relationship breaks down: heavy aggression in one direction is met by even heavier passive limit orders on the other side, preventing price from moving. The algorithm evaluates each candle by scanning for price levels where:
  1. Significant delta exists (one side traded much more aggressively than the other).
  2. Price failed to follow the expected direction within a configurable time window.
  3. Optional confirmations pass (cluster grouping, candle delta, volume location, stacked imbalance).
When all conditions are met, a marker is placed directly on the chart at the absorption level.
Absorption is the footprint of large institutional participants who use limit orders to accumulate or distribute positions without moving the market. Spotting absorption early gives you a significant edge in anticipating reversals.

​
Signal Types

  • Bullish absorption (green marker): Heavy selling was absorbed at a price level. Aggressive sellers hit the bid in size, but price did not drop. This indicates hidden demand below the surface and suggests a potential reversal upward.
  • Bearish absorption (red marker): Heavy buying was absorbed at a price level. Aggressive buyers lifted the ask, but price did not advance. This indicates hidden supply and suggests a potential reversal downward.

​
Core Settings

These parameters control the primary detection logic.

​
Confirmation Filters

These optional filters reduce false signals by requiring additional conditions to be met before an absorption marker is placed.
Enabling multiple confirmation filters simultaneously produces fewer but higher-quality signals. Start with the defaults and add confirmations one at a time to find the balance that matches your trading style.

​
Visual Settings

Control the appearance of absorption markers on the chart.

​
Absorption Lines

When enabled, Absorption Alpha draws horizontal lines at confirmed absorption levels. These lines extend to the right, acting as dynamic support and resistance levels until price revisits them.
Absorption lines that survive multiple retests without breaking often mark institutional accumulation or distribution zones. Watch for price reactions at these levels on subsequent visits.

​
Premium Styles

Absorption Alpha supports Cluster Terminal’s premium rendering engine:
  • 3D Markers: When markerStyle is set to 3d, markers receive realistic lighting, shadow, and depth effects that make them visually prominent on the chart.
  • Neon Lines: The neon line style adds a colored glow around absorption lines, making them highly visible even on busy charts.
  • Gradient Lines: The gradient style renders lines with a smooth color transition.
  • Chrome Lines: The chrome style adds a metallic reflective effect.

​
Alert Rules

Absorption Alpha supports the following alert events: Configure alert sounds and notifications in the global Alerts settings panel.

​
Practical Usage

​
Best Timeframes

Absorption is most visible on lower timeframes where individual trade data is granular:

​
Confluence Setups

Absorption signals are strongest when they align with other structural levels:
  • Volume Profile POC or HVN: Absorption at a high-volume node confirms that institutional participants are defending the level.
  • Session highs/lows: Absorption at the previous session’s extreme suggests that the level is being defended for another session.
  • Stacked Imbalance zones: When absorption occurs at a level that also has a stacked imbalance, the confluence significantly increases signal reliability.
  • Unfinished Business levels: Absorption near an unfinished auction level suggests price may complete the auction before reversing.

​
Common Pitfalls

  • Low delta threshold: Setting minDeltaThreshold too low produces excessive signals on high-volume instruments like BTCUSDT. Start with 1000 and adjust upward.
  • Ignoring context: Absorption in a strong trend is often temporary. Focus on absorption at structural levels (support, resistance, session boundaries).
  • Over-filtering: Enabling all confirmation filters at once may produce zero signals. Add filters incrementally.