The group of investors quietly keeping Bitcoin’s price afloat
A new heatmap tool shows how large buy and sell orders are keeping the Bitcoin market up—or pushing it down. Here’s how to watch what the whales are doing.
BitcoinWisdom has just introduced a new tool that makes it easier to watch large investors—known as whales—controlling the Bitcoin market.
The aggregate heatmap tool lets traders and market analysts see when large buy and sell orders are placed on the market. Looking back over time, it’s easy to see how these big orders have affected the price of Bitcoin.
"The order book heatmaps allow traders to identify key liquidity levels and spot the intentions of big traders without the need to continuously monitor the market depth," BitcoinWisdom told Decrypt.
How does the Bitcoin heatmap tool work?
When it comes to cryptocurrency trading, heatmaps are used to show a graphical representation of the liquidity of a particular market in the form of horizontal bars at each price point.
However, most cryptocurrency exchange platforms will only provide a heatmap of their own order books. BitcoinWisdom's new aggregated order book heatmap, on the other hand, merges the order books from Bitfinex, BitMEX, and Coinbase into a single graph for the BTC/USD market.
The horizontal axis of this chart represents time, whereas the vertical axis represents the order value. Orders at each price bracket are indicated by a colored block, and the intensity of this color represents the number of limit orders at that value.
This trading tool lets you watch what the Bitcoin whales are doing. Image: BitcoinWisdom
Orders below the current price of Bitcoin are called limit buy orders, whereas those above the current price are limit sell orders. These are placed in advance and when the price rises—or falls—to that point, the order is executed and a trade made.
As shown above, there was a large support wall set up at around $8,500, but Bitcoin broke through this wall to reach as low as $8,455 before recovering. Now, Bitcoin has weak resistance around the $8,700 and $8,750 price points.
Spotting sell walls over multiple exchanges using this aggregate heatmap is a great way to monitor the market.https://t.co/qwrgIZt9sz
"Spotting sell walls over multiple exchanges using this aggregate heatmap is a great way to monitor the market," said WhaleAgents, a Twitter account that posts trading tips.
But right now, the price of Bitcoin continues to sink—and there’s no massive buy wall in sight.
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