The order book shows resting limit orders: bids in descending price and asks in ascending price, with the size at each level. The best bid and best ask form the spread. When a market order arrives, it eats through the book from the best price outward. Depth charts plot the cumulative size on each side to show how much it would take to move the price.
Example
The ETH book shows 30 ETH on the ask at $3,000, 50 at $3,002 and 120 at $3,005. A market buy of 200 ETH would clear all three levels and move the best ask above $3,005. If the 120 ETH at $3,005 were suddenly cancelled, the same order would push price further, because that wall was never real liquidity.
Why it matters
The book shows how much size a market can absorb at a given moment and where liquidity clusters. It helps you size orders in thinner coins and explains slippage. Some traders read large resting orders as support or resistance, but those orders can be pulled at any time.
Common mistake
Treating big visible orders as guaranteed walls. Large orders are sometimes placed and pulled to influence other traders, a practice called spoofing. Watch whether a level actually trades and holds, not just how big it looks.
FAQ
- What is order book depth?
- The total size available within a set distance of the current price, for example within 1%. More depth means large orders move the price less.
- Is the order book the same on every exchange?
- No. Each exchange has its own book, which is why prices and liquidity differ slightly between venues.
- Can I see every order in the book?
- No. Some exchanges support iceberg orders that show only part of their size, so the visible book never shows all the liquidity.