Absorption

Absorption is the process of excess selling or buying taking place at a single price or series of prices but being absorbed by resting orders.

Absorption is first and foremost the result of willing buyers or willing sellers at key levels. They absorb excess supply or demand and often times create a stopping point and cause the market to test in the other direction.

Absorption orders are very often present at key levels and confirm the importance of it by adding liquidity in the form of resting orders. Think of this however it best makes sense to you, but here are 2 examples. One buying and the other selling.
Buying Absorption - This is where large resting sell limit orders (sometimes in the form of iceberg orders) absorb excess buying.

Selling Absorption - This is where large resting buy limit orders (sometimes in the form of iceberg orders) absorb excess selling.

Absorption happens every single day in all markets but some are more important than others. Some occur at intraday swing levels and while others are often present at key tops and bottoms on longer time frames.