An exhaustion gap comes after a long run, frequently accompanied by the heaviest volume of the entire trend and by a blow-off-top or capitulation bar. It is the point at which everyone who was going to act finally acts.
The tell, when there is one, is what happens next: an exhaustion gap is usually filled quickly, while a runaway-gap is not. If a gap in the direction of the trend is filled within a few sessions, the trend is in trouble.
Because the label depends on subsequent price, it cannot be used as an entry signal. Its practical value is as a reason to take profits or tighten stops on a position you already hold, not as a reason to initiate a counter-trend trade.
Related: runaway-gap, blow-off-top, capitulation, volume-climax, island-reversal