What is the “wall” for buying and selling?
Imagine that the purchase and sale of Cryptocurrencies takes place offline, on the Cryptocurrency market. Each seller has Cryptocurrency coins, and buyers go between rows with tight bundles of dollars.
We see that there are many bitcoins for sale at $ 20,000, but there is no one willing to buy them at this price. Nearby sold the same bitcoin, but twice cheaper, so the table gathered a huge queue. After some time of bidding there is a problem: cheap bitcoins end, but people do not become less. The crowd buys all the bitcoins for $ 10,000 and the wall is pushed onto the counter with bitcoins for $ 15,000. The price of the coin is growing, as new customers appear, ready to pay more. In such cases, it is said that the bull market is traced in the market. If you imagine the number of buyers and sellers on the price chart, you will get something like a wall.
Here is an example of a chart of orders (walls) for the purchase and sale of bitcoin on the Bittrex exchange.
Green wall – buyers, red – sellers. The height of the chart is based on the number of applications for sale or purchase at appropriate prices. In the middle of the chart there is a point at which both walls gradually form and form a real price in a specific period of time. They literally eat each other.
Where do the data for the graph come from. Order book
You can buy a crypto currency on the exchange by opening an order. We set the price, the number of coins and wait for execution. If the buyer’s order coincides with the seller’s order at the price and offer, it is executed. A bit trite, but the principle is as follows. A highly liquid exchange is not a table on the market, orders are executed quickly, no queues. Some orders hang in anticipation of the corresponding execution price (if it is much more or less than the traded price) and are written in the Order Book – the order book or the “exchange cup”. With active trading, the exchange glass is always filled with applications.
By the volume of demand or supply, one can judge the mood of players in the market. If the demand exceeds supply, then the market looks like a bullish one, or it will soon change the trend to such. If there are more bids than buyers, then, probably, the price will fall, and then it is a bear market.
Golden key or trap
Analysis of walls, glasses, orders helps to better understand the market and the mood of the players. Nevertheless, it is worthwhile to know the following: on kriptornke price moves, in most cases, at the request of major players. They are also called whales. Billionaires are able to mislead with false orders. Imagine, the trader opens a schedule of orders, and there is such a situation:
Beginners will decide that this is a signal to sell coins and will hurry to get rid of it. But, most likely, we see a Fake Wall. The schedule is unnatural and created explicitly for the purpose of psychological manipulation. The red wave is too big compared to the green one. Such waves appear when a negative event is outlined, in connection with which users begin to massively sell a coin. For example, as in the case of Biteconnect bankrupt tokens, which fell in price by 80%.
In our case, the major players have placed false orders, which are unlikely to be fully executed. Unprofessional traders in panic will hurry to get rid of the coin, thereby involuntarily knocking the price down to a level that whales find acceptable for purchase. Then the price will grow again and attract new “hamsters”. And so on ad infinitum.