Sell Wall

What is Sell Wall?

A sell wall is a large sell order for a price level, which usually causes the cryptocurrency prices to fall considerably. Sell walls can be set by anyone, but high-net-worth investors or whales typically use it to influence asset prices for their benefit. However, other smaller investors can latch on and add to the same order for their own benefit. 

The whales can influence the token prices based on the sheer volume or size of their holdings or units of an asset. In addition, sell walls can control asset prices by influencing them to trade under a specific range. The primary purpose of a sell wall is to show other traders that the price can’t exceed a level without overcoming strong resistance. 

For instance, if someone places a sell order of 1,000 ETH at $10,000, the order book will reflect a big sell wall. This will probably stop the price from going over the $10,000 mark. A firm buying pressure and a high number of trades to breach the sell wall and cross the $10,000 resistance. 

Purpose of a Sell Wall

When placed on purpose by large holders or whales, it’s usually placed without any real intention to buy at such levels. Instead, the aim is primarily to influence market sentiments and coerce traders to place their sell orders under the wall. So naturally, this ends up initiating a downward price movement. 

A strong sell wall shows investors and traders that the available supply of an asset will be high once a specific price is reached. This assurance of high supply helps push down demand and prices for the asset. Traders then usually decide not to buy at that price or to sell off their purchases at a lower price, which results in shorting trades for whales. 

Whales and other investors can place sell walls and remove them regularly on an order book to manipulate prices. In addition, most exchanges offer interactive depth charts indicating all buy and sell walls.

A buy wall is the other version of a sell wall, it offers support and cause the price to move upwards.