Buy and sell walls are market conditions created by large traders or crypto whales, and they are visible in the order books of crypto exchanges.
A buy wall refers to a huge buy order placed on the order book of a particular market at a specific bid price, usually to prevent the crypto asset from dropping below that price level. This large buy order acts as a support level, making it less likely for the asset’s price to fall past this point.
Conversely, a sell wall refers to a significantly large sell order or multiple orders on the order books of an exchange. These sell walls are visible to other traders, who may be incentivized to sell first to avoid potential price drops. High-net-worth individuals, like crypto whales, can manipulate prices by creating sell walls, which create resistance levels that make it harder for the asset’s price to rise.
Buy and sell walls significantly influence the crypto market by impacting coin prices and the decision-making processes of traders. When a buy wall is created, it creates a perception of growing demand for a particular coin, leading to an increase in its price. This heightened demand can attract additional traders to purchase the coin, consequently driving the price even higher.
Similarly, the creation of a sell wall generates the impression of increased supply, causing the price to decline. This perceived drop in value can prompt other traders to sell their holdings, further reducing the price.
