Orderbook crypto

The reason why this order type is also known as “stop-limit order” is that traders want to control the risk involved in the high volatility of Bitcoin. In this case, the trader wants to sell before the Bitcoin price falls below EUR 8,900. Once the stop price is triggered, the order will fill immediately if there is enough liquidity in the order book. Cryptocurrency order book Be the first to get critical insights and analysis of the crypto world: subscribe now to our newsletter.

Our price slippage calculator takes a market order size as input, and computes the slippage using raw order book snapshots How Does an Order Book Work? One factor that determines the price and crucial property of every exchange is the order book depth. In principle, the order book depth is defined by the distribution of Bitcoin amounts and the limit prices placed in the order book by traders. In our environment, almost all traders decide the Bitcoin amount and limit price by sampling these two values from predefined distributions, thus filling the order book with orders.

Order books may differ in structure or because of the information provided: some show only placed orders, and some also show filled orders – which is particularly useful when looking for fully transparent information. Some order books are so developed that traders could virtually use only the order book to trade without looking at price charts. Collectives™ on Stack Overflow When a market is not liquid, it’s easier for whales to manipulate the market, and order books are precisely one of the tools used to do that easily. For instance, a whale that wants to sell his assets at a higher price could post a large buying order at a price which is higher than the average price you find in the order book. Traders will then tend to think that big players believe in a rising price for that market and will tend to buy more, actually raising the price of the asset.

Looking for clusters of orders at certain price levels can be insightful. These clusters often act as psychological levels of support or resistance. For instance, a large cluster of limit buy orders could suggest that a significant number of traders believe that the asset is a good buy at that price, providing a potential level of support. Live data loading and processing The exchange typically maintains the CLOB, which acts as an intermediary between market participants. When a participant submits an order to the CLOB, it becomes part of the order book, which records all the buy and sell orders at different price levels. In addition, the order book displays the current bid and ask prices, which represent the highest price a buyer is willing to pay (bid), as well as the lowest price a seller is willing to accept (ask) for a particular financial instrument.