What Is a Sell Wall?
A sell wall is a term used in the cryptocurrency market to describe an area of large sell orders that are placed at a single price point. This creates a “wall” on the order book, which can be seen as a visual representation of supply and demand for that particular asset. Sell walls are often created by traders who want to limit their losses or protect profits from being taken away by other traders. They also serve as psychological barriers, discouraging buyers from entering into trades with them due to fear of losing money if they buy too high.
Sell walls can have both positive and negative effects on the market depending on how they are used. If there is strong buying pressure behind it, then it could indicate that prices will rise soon since there is more demand than supply available at this price level. On the other hand, if there is weak buying pressure behind it then it could mean that prices may fall soon since sellers outnumber buyers at this price level. In either case, understanding what causes these walls and how they affect trading decisions can help investors make better informed decisions when investing in cryptocurrencies.