Exchange-Onchain Market Depth


The Exchanges-Onchain Market Depth indicator is a twist on the traditional market depth indicator, which is shown in the stacked columns. The stacked columns on the left represent the total volume in buy orders sitting on the limit order book, while the right columns display the volume in sell orders.

On top of these columns, you can see a variation of IntoTheBlock’s In/Out of the Money. The clusters represent the volume in tokens that had previously been bought at each of these price ranges, providing an on-chain perspective of historic buying levels.

πŸ’‘ How can I use it?

The Exchange-Onchain Market Depth indicator provides helpful information about potential buying and selling interest from both an order book and blockchain perspective.

From the order book point of view, large stacked columns represent a high volume of buying/selling orders. This is helpful to gauge buying/selling interest, but it is important to keep in mind that limit orders can be removed from the order book at any time. For instance, the example above shows approximately the same volume (~7.5k BTC) from buyers and sellers within 10% of the current price of Bitcoin. Further away from the current price, though, we can see significantly more order volume looking to buy at a 30% discount (17k BTC) than the volume looking to sell (10k BTC).

The on-chain clusters on top provide the perspective of previous buying orders. Users will be able to scroll over these clusters to see the amount of crypto, Bitcoin in this case, previously purchased in these price ranges. As explained with the In/Out of the Money indicator, large clusters tend to act as strong support/resistance as these have previously been key buying zones. Following the example above, the 1.6 million BTC previously bought at a 30% discount from current prices show strong support at this range, while the 110k BTC bought at a 30% premium point to low resistance if prices reach this level.

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