Buy wall refers to a large buy order placed on the order book of a particular market, set at a particular bid price, usually to prevent or ensure the crypto asset does not drop beyond that set price level.

Traders (i.e., buyers and sellers) on a cryptocurrency exchange are matched together on what is called an order book – a compilation of all buy and sell orders on the platform. The order book helps the exchange identify a buy order set at a particular price and match it to a sell order at that same price. In essence, the cryptocurrency exchange executes the order book by matching each buy and sell order at a particular price.

Order Books

In a bid to control the price of a crypto asset or simply manipulate the market in their favour, large holders (whales) of the asset place a huge buy order on the order book. The natural market sentiment of the average trader will be to place their buy orders not lower than the price set by the wall as there is a very low probability that their orders will get filled at a lower price.

For example, suppose a whale (or group of whales) places an order limit of $7,000. In that case, other traders will tend not to place their buying prices at $6,999 as sellers in the market will be more enticed by a price set at the buy wall and above.

Although buy walls can be true, and a wealthy investor is simply willing to mop up a huge chunk of a crypto asset for themselves, it is more probable that the buy wall exists on the order book to manipulate the market.

Just as with a sell wall, the most common method of identifying if a buy/sell wall is real is by the time spent on the order book of the exchange as buy/sell walls are typically short-lived and may appear countless times at different prices if placed by an automated trading bot.