The order book is a tool used on cryptocurrency exchanges to display all buy and sell orders for cryptocurrency. It shows what prices buyers and sellers have set, and helps understand where the market is heading.

The order book is divided into two parts:

1. Bid — buy orders. These are requests from people who want to buy cryptocurrency. They specify the price at which they are willing to do so. The higher the price, the more attractive this request is for sellers.

2. Ask — sell orders. These are requests from people who want to sell cryptocurrency. They specify the price at which they are willing to do so. The lower the price, the more attractive this request is for buyers.

In the order book, you will see two columns: one with prices and the amount of buy orders (bids), and the other — for sell orders (asks).

How to read the order book

1. Best Bid — is the highest price someone is willing to buy cryptocurrency for. This is the most advantageous price for sellers if they want to sell.

2. Best Ask — is the lowest price someone is willing to sell cryptocurrency for. This is the most advantageous price for buyers if they want to buy.

3. Spread — is the difference between the best bid and the best ask. The smaller the spread, the more liquid the market.

Example:

Suppose you are looking at the order book for a cryptocurrency, for example, #BTC☀ :

- Bid: 10 bitcoins at $95,800.

- Ask: 15 bitcoins at $95,900.

This means that someone is willing to buy 10 bitcoins at $95,800, while someone is willing to sell 15 bitcoins at $95,900. If someone wants to sell for $95,800, the transaction will occur at the bid price. If someone wants to buy for $95,900, the transaction will occur at the ask price.

How to use the order book for trading?

- If there are many orders on the bid side, this may indicate increased buyer interest. This may mean that the price will rise.

- If there are many orders on the ask side, this may indicate increased seller interest. This may mean that the price will fall.

It is also important to pay attention to the depth of the book, meaning the volumes of orders. If there are large volumes on one side of the book (for example, on the bid side), this may indicate that the price will be held at this level because traders do not want to let the price pass through such volumes.

Reading the order book helps traders better understand market sentiment and make more informed trading decisions.

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