Sell Wall Definition
A sell wall in cryptocurrency is a situation where a large limit order has been placed to sell a particular coin. This can prevent the price of the coin from rising above the price set by the sell wall, as there are a significant number of coins available at that price. It is often visualized on a depth chart, creating a “wall” appearance.
Sell Wall Key Points
- A sell wall is a large limit order to sell a cryptocurrency.
- It can prevent the price of the coin from rising above the price set by the sell wall.
- Sell walls are often visualized on a depth chart, creating a “wall” appearance.
- Sell walls can be a strategy used by traders to manipulate the market.
What is a Sell Wall?
A sell wall is a concept in cryptocurrency trading that refers to a situation where a large limit order has been placed to sell a particular coin. This can be seen on the order book of a cryptocurrency exchange, where all buy and sell orders are listed. When a large sell order is placed at a certain price, it can prevent the price of the coin from rising above that level, as there are a significant number of coins available at that price. This creates a “wall” on the depth chart, hence the term “sell wall”.
Why does a Sell Wall occur?
A sell wall can occur for a variety of reasons. It could be a trader or group of traders trying to manipulate the market by preventing the price from rising. Alternatively, it could be a large holder of the coin who simply wants to sell their holdings at a certain price. Regardless of the reason, the effect is the same: the price of the coin is unlikely to rise above the price set by the sell wall until the entire order is filled.
When does a Sell Wall happen?
A sell wall can happen at any time in the cryptocurrency market. It is more likely to occur when there is a large volume of trading and significant price volatility, as this provides more opportunities for traders to try and manipulate the market.
Where can you see a Sell Wall?
A sell wall can be seen on the order book of a cryptocurrency exchange. Most exchanges provide a visual representation of the order book, often in the form of a depth chart. On this chart, a sell wall will appear as a vertical line or “wall” at a certain price level.
How does a Sell Wall affect the market?
A sell wall can have a significant impact on the market. It can prevent the price of a coin from rising, which can discourage other traders from buying. This can lead to a decrease in trading volume and potentially a decrease in the price of the coin. However, if the sell wall is removed or the entire order is filled, it can result in a rapid increase in price, as there is no longer a large supply of coins available at that price.
