The world of digital currencies or cryptocurrencies, which is very prosperous today, has a variety of terms that those active in this market should be familiar with. Buy Wall and Sell Wall are two common terms in this market, which are a special feature of the market Digital currencies describe These two components create conditions that the price of an asset in this market does not exceed a certain level. These walls are one of the healthy and natural behaviors that are formed in the market, but because the market is young, it is also common to create them artificially. In this article, we intend to examine the nature of buying and selling walls and how to interpret them in the cryptocurrency market.
What is a shopping wall?
The term buy wall refers to a broad buy order set or the accumulation of buy orders at a certain price level. In this case, the volume of purchase orders is so high that if the transaction is done, it will increase the price of the asset. In fact, creating a shopping wall makes that Prices will increase before orders are placed. The reason for this is that after the price hits the wall, we will face a significant reduction in the supply of the asset. Also, the buying wall shows the confidence of the market that the price level is higher than the wall.
How to find walls to buy?
Traders in the cryptocurrency market place their buy orders above the buy wall to acquire cryptocurrencies or stocks. This will further increase the prices. With all these things, it should be noted that buy walls do not reflect the real sentiments of the market. As mentioned, due to the youngness of the digital currency trading market, it is also possible to create a purchase wall artificially. In fact, by using these walls, it is possible to manipulate the market in a way that does not indicate a real interest in buying an asset at that price.
What is a sales wall?
Right at the opposite point of the buy wall is the sell wall, which is based on a set of broad sell orders or the accumulation of sell orders at a certain price level. Selling walls are seen in most digital currency transactions, which can lead to a decrease in the price of the asset. Some kind of sales walls showing An increase in the supply of assets at that price which puts pressure on demand and lowers prices.
How do I find walls for sale?
Traders who intend to sell their assets in the market are aware that if the price is set above the selling wall, the value of the asset may never reach their order price. For this reason, these people place their orders under the wall in advance. As a result of this work, the price of assets decreases even more. In this case, due to the great resistance against the cryptocurrency in that price range, the price of the asset will decrease. Selling walls, like buying walls, can be artificially created in the market by whales or digital currency robots.
Identifying Buy Wall and Sell Wall
To better identify buying and selling walls, you must first Order book concept (Order Book) and the trader must have enough knowledge of how to read an order book in the market. An order book is an electronic list of buy and sell orders organized by price level for a particular security or financial instrument. In fact, the order book expresses the number of shares offered or offered at any price point in the market. These notebooks are completely dynamic and are updated momentarily.
In each order book, it is possible to see the conditions of the offer and request. An offer is called a buy order and a request is called a sell order. When the price points of a bid and an ask match in the market, the exchange triggers a transaction that can affect the price of the asset. To better understand, for example, if there is a lot of demand for a cryptocurrency in the market and buyers are willing to pay a high price for it, it is possible for them to raise their bid until it matches the seller’s price. . Exactly when such transactions take place, we see asset prices rise. Order books therefore help traders in the cryptocurrency market to make more informed decisions, which information can also be influenced by large players who wish to manipulate market sentiment.
Identifying the basis of the depth chart (Chart Depth) in the buying and selling wall
In the digital currency market, there is a tool called depth charts that can be used for better understanding Supply and demand of an asset And the wall used to buy and sell. But this chart contains some key components that you should be familiar with.
- Line Bid: It represents the cumulative value of buy orders or requests at each price point, which can be seen with a green line on the left side of the chart.
- Line Ask: It represents the cumulative value of the sell or supply orders at each price point, which can be seen with a red line on the right side of the chart.
- X axis: It is the horizontal axis on the chart, which usually shows different price points in buy and sell orders in dollar units.
- Y axis: The vertical axis of the chart represents the number of orders for an asset at each price point.
By using this chart on the buy and sell wall, traders can easily see the number of buy and sell orders at each price point and get good information about the market situation.
Wall of purchase and sale; The wall of rising and falling asset prices
Buying and selling wall are two common terms in the digital currency market that traders in this market should be familiar with its concept and function. These walls are referred to as broad orders to buy and sell an asset at a specific price point, which can increase or decrease the price of the asset in the market. Usually, these walls are caused by natural market sentiments, but due to the youth of the digital currency market, it is possible to create them artificially by whales in order to increase and decrease the value of a cryptocurrency.
What is the inscription on the shopping wall? Introducing the buying wall and the selling wall for the first time on Wallex blog. appeared.
