An electronic list of buy and sell orders for a specific asset organized by price level. Buyers and sellers interests are represented via orderbooks. An order book depicts the dynamic connection between buyers and sellers by visualizing a list of outstanding orders for a specific asset in real time.

The quantity of orders being bid on or offered at each price point, also known as market depth is listed in an orderbook. Each row is a separate order.

• Price: Price level. Top of the order book for the buy side is the highest bid. Top of the orderbook for the sell side is the lowest ask.
• Amount (Size): The number of units or currency denominated amount people are willing to buy or sell at a specific price level
• Total (Sum):
  • Buy Side: The total amount of units or currency denominated amount people are willing to buy at the price level or better.
  • Sell Side: The total amount of units or currency denominated amount people are willing to sell at the price level or better.

Depth Chart

Visualizes the order book in graphical form. It displays the cumulative sum of buy and sell orders at different price levels.

• Buy Depth: The area of the chart showing cumulative buy orders at different price levels
• Sell Depth: The area of the chart showing cumulative sell orders at different price levels

Gives insights into market liquidity and potential support/resistance levels.

Market depth refers to the capacity of the market to handle substantial orders without causing significant price movements.

There’s more buying interest below the current market price when the green side is higher than the red side. Conversely, when the red side is higher than the green side, this indicates more selling interest.

Important Terms:

• Bid-Ask Spread: The difference between the highest bid and the lowest ask. Market makers capitalize on this difference as their profit.
• Slippage: Occurs when a trader’s order is filled at a different price than expected. This happens when the exchange cannot fulfill market order at the preferred price due to high volatility and thin order books.
• Orderbook liquidity: Liquidity refers to the smoothness of trading a crypto without causing significant price impact. A highly liquid order book entails a substantial presence of buyers and sellers transacting substantial quantities of an asset. Also, a highly liquid market has a smaller bid-ask price than a low-liquid one.
• Support and Resistance: Support is the price level with a considerable amount of buying interest. On the contrary, resistance is the price level with a significant amount of selling interest.
• Top of orderbook: Refers to the two price extremes represented by the highest bid and lowest ask