Bitcoin Trading: Interpreting Order Books

In this article we will review how read a bitcoin order book, how to interpret a bitcoin order book, and how to spot common market manipulation techniques by properly understanding order book dynamics. What is an Order Book? An order book is a ledger containing all outstanding orders – instructions from traders to buy or sell bitcoin. An order to buy is called a “bid” and an order to sell is called an “ask.” Bids and asks are paired up as soon as their requirements are fulfilled, resulting in a trade. For introductory purposes there are two primary order types …