When you visit an exchange for the first time, it’s a lot to get used to. There’s so much information on screen and things are changing all the time. Something that’s always shown, is an order book. This visualizes a real-time list of outstanding orders on a certain asset. This list is split between buyers and sellers, showing supple and demand.
Even though order books are always visible and always serve the same purpose, they can differ visually. The information in an order book is always the same: bid, ask, amount and price. This information is shown on the buy and the sell side.
Each of these order books are slightly different, but they all show “price” and “amount”. On the Binance order book this means people are selling X amount of bitcoin for price A per coin, which brings the total to amount Z dollar. The order book on Kucoin works exactly the same.
On Bitfinex they also tell you the amount of orders at that certain price range. As you can see, it’s all slightly different. None of them is better than the other, as it all comes down to preference and familiarity.
Buy side and sell side
The side of the order book that looks the most green, is always considered the buy side. That makes the red one the sell side. What you can see on the buy side are orders. People want to buy X amount of units of a certain asset as a specific price, and they hope a seller will want to sell against that price. Once a bid is matched with a sell order, the trade will be arranged.
Sometimes there’s a lot of interest to buy a certain asset at a certain price. This interest can come from one person, or multiple. That’s something we can’t see in an order book. But such a large order will block sales at a higher rate. That means it functions as a wall. We call this a ‘buy wall’. Obviously there are also ‘sell walls’. Buy walls can be considered a form of support, while sell walls are a resistance.
These order books can tell you something about the demand, and about what people are willing to spend on an asset at this very moment. On a very busy, active exchange the order book tends to be very dynamic. The more movement there is in an order book, the more liquidity there is. Consider this a good thing, because assets that are traded a lot are considered valuable.