Understanding and reacting to a bid wall


#1

Hi,
today i saw an order of 104 BTC at one price level.

How would you react to a situation like this as a trader?
Are you able to forecast the incoming price? Do you expect that the price will go up, even though the indicators are showing a slightly downtrend?
Does a huge bid wall have any influences on a high volume coin like BTC, when the price is determined by many exchanges together at the same time?
Or was it just a “Fake-Order”, that will be canceld anyways soon?


#2

I prefer relying on TA + fundamentals than worrying about these walls. Most of the time they get canceled before processed and are set just to scare traders or to keep price up/down. The chart you see is just for one exchange. So even if the price is determined by many exchanges together, the buy wall would only cause effects on this one. We also have a lot of bots trading so usually the prices of different exchanges walk together. I usually track Bitifinex + USDT Bittrex together (in the same chart) and sometimes this helps me forecast the incoming moves (not always :smile:)
Let’s imagine this wall of 104btc @ 4005usd is eaten up by a strong Selling Force, then we would have a big sell volume spike, while the price would move down to the next buy order at 4000usd. Only 5 dollars difference with a huge volume traded. Naturally the big volume would suggest a downtrend.
Another possible scenario, is when a lot of Buy Orders are set on top of the wall, causing the price to rise… and after a while the wall disappears and (maybe?) the Whale got what he wanted.
Another possible scenario: the market price ‘wants’ to go down (TA + news suggests downtrend), but the buy wall would ‘delay’ this downtrend a bit. Maybe the price go up a bit as consequence of the wall, but goes down afterwards (maybe after wall disappear, who knows?)
Anyway, its all speculation and the crypto-crazy-market can be very surprising quite often. It’s like a rollercoaster (and I :heart: it). That’s why I find it useful to play with possible scenarios (TA) + fundamentals (specially for long term) + risk management.

Sry for bad english :joy:


#3

One of the biggest walls I have seen recently. Around 4 mil.US and here is a strategy I cought from a trader about sell wall strategy;

“I use this type of trading to accumulate buys at a cheaper price. Ex: if I spend 2 hours buying small amounts of coins so nobody notices the large buys, then I put up a large sell wall ($30k-$45k) to encourage sells. After that pushes down the market from panic sellers trying to under sell my wall, I instantly buy those sells up and remove my wall and then put in a buy order for enough tokens to raise it 3%-7%. That gets traders attention and I let them take the rest over and pump the price 10%-15% more. Then I drop my accumulated coins on them. Usually, I buy up the orders down to my original 3%-7% I purchased to build the trade tension and that gets written off as me just paying trading fees and the rest of the coins are all profit. This is 1 reason you may see some decent sell walls on random coins that are used just to push the price down”


#4

Any analysis on this? Been watching some sell walls for about 30 bitcoin pop up and then vanish.


#5

Walls cost nothing so they mean nothing. End of story.


#6

It’s just cool watching the walls get busted down!


#7

Wouldn’t a big sell wall cause FUD, driving price down?

Honestly I’m still trying to understand buy ,sells orders/walls for a while now and I see you saying it doesn’t matter and I’m curious as to why?


#8

Those walls can be manipulated - They can be put up with no intention to actually execute at that price.

If price actually executes at those levels and swallows those walls up, then its certainly real, but if you see ‘walls’ that are far from the actual bid/ask spread, then consider it manipulation until execution.


#9

I see, makes sense now. Thank you


#10

For example, lets say i was a ‘whale’ aka large fund manager and i needed to buy a boat load of Bitcoin. One way to manipulate the book is to put in huge sell walls and make it look like the order book is heavily weighted on the sell side. Other traders see this and try ‘front run’ the sell order but little do they know, you are sitting on the buy side accumulating all that order flow.

There is many ways to manipulate but dont always believe what you see. Price is king, always.


#11

Today I was browsing the charts and came across this with CND - mind you, it’s a 1 min chart. There is one order for quite a bit of BTC. I’m curious to know how this could play out?

p

Darcy C


#12

There’s also people in this world who just have stupid amounts of play money… Sometimes they just set up a buy /sell at the price they want… sometimes when the price doesn’t hit the price they want, they remove the buy/sell again…

People do this all the time, you just don’t notice because we don’t have millions to throw around…

Of course there’s also manipulation, but tbh crypto obviously also attract tons of people who might believe in conspiracy theories a little too much