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May 14, 2018, 03:27:02 PM |
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This content is for new traders entering the market, and those who are not familiar with the concept
"Sell wall" can be seen on every Coin Exchanges. It often contains two parts: the blue part or "Buy wall" and the red par, which is the "Sell wall". If the red part is bigger than the blue one, that means the "sell wall" is growing and investors are more likely to hold coins, waiting for a decrease.
Sell walls are usually created by a large number of sell orders at a certain price. Sell wall appeared will prevent investors from offering a higher price than the price of the "wall" due to the fear of unable to sell, thus pushing the coin price down. This is also the main reason why some cryptocurrency, despite being in the uptrend, still show signs of slowing down or falling at certain points.
TWO TYPES OF SELL WALL
Real Sell Wall - RSW: This wall is usually caused by market fluctuations and financial events, such as negative corporate information, negative perceptions, failure to implement certain projects, hacker, and fraudulent issues, or a sell-off. RSW “stay high” for a period and usually comes near the peaks order for coins that have high transactions volume. These "sell wall" appear for good reasons, caused by real events of companies and market. So, if you pay close attention to this wall, you will notice its gradual uptrend.
Fake Sell Wall - FSW: This wall is created by whales or "pump and dump" groups that aim to dominate the market. This will usually last for a short period and occasionally long period. It is usually coordinated by a group, individual or trading bot (an algorithm programmed to automatically create orders at certain conditions or events). Fake walls can show up and disappear at any time, even in a bull market or after positive news with no selling pressure. In short, FSW just “popup” from nowhere with an unnatural figure.
In general, sell wall appeared means that it is not the right time to sell as it represents price decrease pressure on the market. Or in other words, the price may fall soon after sell wall and you would make more profit if you let the price touch its bottom.
However, it is important to distinguish between RSW and FSW. FSW can appear and disappear immediately. In the context of whales secretly manipulate the market and create FSL, you need to be extremely cautious, especially when you are a daily trader.
As we all know, whales are completely capable of setting and controlling the Exchange as well as the price of coin at some cases. They can place large sell orders, creating a fake sell wall that keeps prices low. Once purchased, they will remove the sale order and the price would increase again. This is how they benefit from making FSW. They repeat this process many times and of course, the benefits are constantly increasing.
If you are a newbie, there will be times when you encounter a situation of RSW and FSW. In Crypto trading market, if you want to survive and actually make a living out of it, it is important to always maintain high spirit, never stop learning, and don’t even give those whales a chance to trick you into their trap.
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