Complete Guide to the Order Book (Market Depth): Essential Basics Traders Should Understand First

If you’ve just started trading crypto assets, you might not know what the lists of buy and sell quotes displayed on the chart screen are. That’s the order book. Mastering it lets you instantly see the market’s supply and demand conditions.

What’s an Order Book? In Simple Terms

An order book is a list of all the current “buy” and “sell” orders waiting at the exchange right now. Think of it as a visualization of the market’s supply and demand balance.

Color Meaning:

• Red = Sell Quotes (the prices and quantities people want to sell at)
• Green = Buy Quotes (the prices and quantities people want to buy at)

For example, with Bitcoin:

• Best ask price: $7,045.50
• Best bid price: $7,044.50

In this case, if you want to push the price up to $7,046.00, buying all 258,951 units at the $7,045.50 ask will automatically move the price up to the next available sell quote.

Two Things Traders Can Read from the Order Book

1. Judge Buying and Selling Pressure by Order Size

A large buildup of buy limit orders = lots of people want to buy = potential for price to rise
A thick wall of sell limit orders = lots of people want to sell = risk of price drop

2. Predict Large Trade Risks by the Spread

Small spread (difference between bid and ask) = high liquidity, price less likely to move even with big trades
Large spread = thin order book, big trades can move the market significantly

Platform Settings: How to Use 0.5 and 1

You can switch the display granularity of the order book with the button in the upper right. The detail level changes what information you can see.

⚠️ Important Note

Order book depth indicates liquidity, but traders can cancel orders before execution, so it’s impossible to fully predict the market using only the order book. Always combine multiple sources of information and make careful decisions.