Sells Walls: You know know what these are and how to spot them.
I've seen a number of people asking on twitter/reddit what sell walls are. I was getting ready to reply, but decided a larger post might be better.
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Sell Walls: What are they?
In the literal sense, a Sell Wall is exactly what is sounds like: A massive wall of crypto being sold at around the same price.​
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The image here is a very clear sell wall that could potentially be seen looking at the depth chart on an exchange.
A sell wall is something whales do either by themselves or in a group to manipulate the price a of a stock/crypto. The whale will put a massive order for a crypto in at a particular price to stop any larger orders from getting through. Their hope is to stop the price from climbing any higher in a hope that it'll actually reduce in price allowing them to get a better entry point and accumulate more.
Example:
5 rich crypto whales get together. They're very bullish on a particular crypto. Lets use Bit Connect (BIT CONNNNECT) as an example here to avoid any accusations of shilling. These whales love Bit Connect, and they want to buy much more. However, if they all start throwing 10s of millions of dollars into the crypto at market price, the crypto will SKY rocket in price as the buying pressure sends it soaring. So instead, they do this:
  1. 1.
    They each already own some large number, lets say 1 million each. They all decide to sell their crypto at or around the same price, let's say $100. Now, there's an order for five million Bit Connect at $100.
  2. 2.
    Any order that's trying to be sold at a price greater than $100, never gets sold/liquidated. Everyone buying gets in at $100 instead.
  3. 3.
    Anyone who wants to sell now *has* to sell at $100 or less, or there's no guarantee there's will sell.
  4. 4.
    Now that a bunch of people who would have sold Bit Connect at greater than $100 are reducing their sell price. If the sell wall is big enough, this downward selling pressure causes the crypto to decrease in price.
  5. 5.
    The whales can now start buying Bit Connect in at a lower price allowing them to accumulate much more without having to worry about the price sky rocketing.
What can you do with this info?
Unfortunately, there's nothing you can do to stop whales from making plays like this. All you can do is learn to recognize these plays and use them as a tool to make better decisions yourself. How? If you see a sell wall, it could be a great indicator of bullish behavior hiding behind a seemingly stagnant crypto. I'm by no means saying you should go out and invest because of this (whales are wrong too), but it's an extra factor that's definitely worth noting.
It's also worth noting that sell walls are particularly effective on smaller cryptos that have less volume. The bigger the crypto, the more money is necessary to create a real sell wall. Things in the top 5 are very unlikely to be easily manipulated this way.
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