What is «the wall» for the purchase and sale
Imagine that buying and selling of cryptocurrencies occurs in offline, the cryptocurrency market. Each seller has the crypto coins, and shoppers walk between the rows of tight bundles of dollars.
We see that for sale of bitcoins on a $20,000 lot, but willing to buy them at this price no. Next sold the same bitcoin, but twice cheaper, so the table was a huge queue. Some time later bidding problem: cheap bitcoins run out, and people do not become less. The crowd is buying up all the bitcoins for $10,000 and the wall approaches the counter with a bitcoin for $15,000. The price of the coin is increasing as there are new buyers willing to pay more. In such cases we say that the market observed a bullish mood. If you imagine the number of buyers and sellers on a price chart, you get something like walls.
Here is an example of the chart of orders (walls) for the purchase and sale of bitcoins on the exchange Bittrex.
Green wall buyers red sellers. The height of the graph is based on the number of applications for sale or purchase at reasonable prices. In the middle of the chart is the point at which gradually attracts both walls and form a real price in a specific period of time. They are literally eating each other.
Where are the data for the graph. Order book
Buy cryptocurrency on the exchange using order open. We set the price, the amount of coins and waiting for execution. If the order of the buyer coincides with the order of the seller at the price and offer, it is executed. A little corny, but the principle is. Highly liquid exchange is not tables on the market, orders are executed quickly, no queues. Some of the order freezes in anticipation of the relevant strike price (if a lot more or less traded) and are recorded in the Order Book — order book, or «the Dom». In case of active trading exchange, the glass is always filled with applications.
The application to purchase bitcoin on the exchange Bittrex (bids — purchase price demand).
Sell orders (asks sales price of, sentences).
Order Book in the form of glass exchange Bitfinex.
The volume of demand or supply we can judge the attitude of players on the market. If demand exceeds supply, then the market is bullish or will soon change the trend of such. If more than buyers, it is likely that the price will fall, and then we are talking about a bear market.
The Golden key, or a trap
The analysis of the walls, glasses, orders helps to better understand the market and the mood of the players. However, you should know the following: the stock market price is moving, in most cases, at the request of the major players. They are called whales. Billionaires are able to mislead by a false order. Imagine a trader opens a chart of the orders, and there is this situation:
Beginners will think this is a signal to sell the coins and rush to get rid of it. But most of all, we see a Fake Wall. Graph unnatural and created explicitly for the purpose of psychological manipulation. The red wave is very superior to the green size. These waves appear when some negative event, in which the users start to massively sell the coin. For example, in the case of tokens of a bankrupt BitConnect that have fallen in price by 80%.
In our case, the big players put false orders, which are unlikely to be fulfilled completely. Amateur traders are in a panic rush to get rid of the coins, thereby inadvertently knock the price up to a level that whales deem acceptable for purchase. Then the price will rise again and attract a new «hamsters». And so on to infinity.