Cryptomarket is growing up, and the technology and concepts of the stock market inevitably come into the environment of crypto-investors. Although at the same time, nobody canceled our specifics – and is unlikely to cancel it. However, just now, in the bear market, the crypto community was replaced by the phrase “to hit the Order book”. Investors intuitively treat it as “to sell-off the cryptocurrency” – with negative consequences for the market. But is it?
Order book, in the other words – Market depth or the Depth of Market (DOM) – reflects the orders for the sale and purchase of assets in real time. It provides information on the issued limit orders, as well as on deferred and market orders. Example: on the left is a candlestick chart of an oil futures, on the right is Order book showing the deals at that time:
- Price- the current price of the asset;
- BID / ASK – buy and sell orders;
- SPO – spoofing algorithms (spoofing – placing orders in the trading terminal and withdrawing them before they are removed, questionable way of the speculation)
- DND – iceberg orders (hidden orders of more than 10 ticks, which are used by big players)
Order book shows the number of contracts for buying and selling in the range of ten ticks. Those. the glass displays those limit and deferred positions that are closest to the market value.
So what is “to hit the Order book”? To send all new orders.
Analysts say that this behavior is typical for periods of panic. A well-known crypto expert, analyst Teeka Tiwari, notes: “When you hit the Order book in a weak market, you provoke even bigger sales …” At the same time, Teeka notes that this behavior often occurs when assets are simply stolen, for example, as a result of hacking. And their new owner is in a hurry to get rid of them at any price.
Summarize: Order book is a scheme of applications for the purchase (bid) and sale (ask) of securities or crypto-currencies at the exchange. It gives information to the trader about the demand and supply that is on the market at the moment. If the orders are not executed, and they are canceled, it shows that the asset will go in the direction of canceled orders. If large orders appear, it signals that the asset will go in the opposite direction. This tactic works well if you trade in short positions. Order book online can be seen on any crypto-exchange. Crypto is beyond competition, here is given the most detailed info without delays. Seeing the behavior of other market players, you can predict price movement with a high probability. Order book is a prerogative of small traders. Big players, marketmakers, almost do not use this tool. Rate differencies are insignificant as for them.