Price Rejection

Price rejection occurs when an asset price moves toward a specific level but fails to sustain trading activity there, resulting in a rapid reversal. This phenomenon indicates a significant imbalance between buy and sell orders at that price point.

In order flow analysis, it suggests that market participants perceive the price as either too high or too low, leading to immediate counter-pressure. Traders often identify this through long wicks on candlestick charts, showing that the price was pushed back after testing a zone.

It is a critical signal in market microstructure, revealing where liquidity providers or large institutional players are actively defending or rejecting price levels. Recognizing rejection is essential for understanding short-term support and resistance dynamics.