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Question: You notice a huge ask wall has appeared a few cents above the last price (and can assume it's "real"). What does this mean?
We're going DOWN! SELL SELL SELL! - 5 (12.8%)
We're going UP! BUY BUY BUY - 11 (28.2%)
Om nom: tasty cheap coins! - 12 (30.8%)
Who knows? - 8 (20.5%)
Who cares? - 3 (7.7%)
Total Voters: 39

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Author Topic: On the meaning of "walls" and liquidity  (Read 1117 times)
copumpkin
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February 23, 2012, 01:48:23 AM
 #1

I'm just wondering how people interpret market depth around here. Please comment to elaborate on your reasoning process, if you think it's of interest.

Edit: this isn't so much a question about "fake" walls that disappear if you tickle them. I'm just asking about walls that you can assume people actually intend to leave in place.
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February 23, 2012, 01:58:22 AM
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Who knows?  I've seen 10,000 BTC walls flash in and out of the depth chart within seconds.  It usually doesn't mean anything.  Bots will be bottin'
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February 23, 2012, 02:06:36 AM
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Who knows?
I assess the situation to determine if said wall will halt movement. I look at volume, support, resistance beyond it, where we've been previously, how long it's been standing, a few others.

Then I move on my decision.  Smiley

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February 23, 2012, 02:25:42 AM
 #4

One thing I notice that people seem to mis understand is that a wall is not necessarily resistance because it might actually be providing the needed liquidity at a certain price for someone who wants to buy/sell a large amount.

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February 23, 2012, 02:54:35 AM
 #5

What's funny about walls is that while most people assume buy-walls are "fake", on the other hand, whenever an ask-wall appears they run for the hills.

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February 23, 2012, 03:04:29 AM
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What's funny about walls is that while most people assume buy-walls are "fake", on the other hand, whenever an ask-wall appears they run for the hills.

This is due to the ingrained "need" for fiat. They would rather be stuck with over priced fiat rather than over priced BTC.  Wink

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February 23, 2012, 04:20:01 AM
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What's funny about walls is that while most people assume buy-walls are "fake", on the other hand, whenever an ask-wall appears they run for the hills.

This is due to the ingrained "need" for fiat. They would rather be stuck with over priced fiat rather than over priced BTC.  Wink

Loss aversion ( see Kahneman and Tversky, 2000.  Choices, values and frames )

Introducing constraints to the economy only serves to limit what can be economical.
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