Buy Wall Meaning

Jun 18, 2023 | Updated Jul 19, 2023

A buy wall is the result of a large buy limit order(s) placed on a cryptocurrency when it hits a certain price. Automated trading algorithms are responsible for most buy walls.

What Is a Buy Wall?

A buy wall in crypto refers to a massive single buy order or multiple buy orders placed on the order book when a cryptocurrency hits a specific price. It occurs when the buy limit orders significantly exceed the volume of sell orders.

Buy walls can be caused by a single trader if the trader is a whale, or an organization with enough liquidity to have an impact on the value of a cryptocurrency by either selling or buying in bulk. They can also be created by hedge funds, trading institutions, automated trading bots, or a group of traders or investors working together.

The main purpose for buy walls is to prevent the value of a certain cryptocurrency from going below a certain threshold. However, it could just be an investor trying to increase their crypto holdings when they are bullish on it.

Buy walls are also a response to attempted price manipulation, where a whale has the power to move the market up and down with big buys. In such cases, the buy walls may appear quickly and disappear once the whale has achieved their goal of price manipulation.

For example:

Say the price of BTC has been trailing below $16,000 for more than 2 months and the market no longer seems appealing to investors. An institutional investor or whale, understanding that fear will soon creep in and investors will start liquidating, makes a purchase of 5,000 BTC at $15,000 each. This is likely to illustrate a spike in demand, hence, driving the price up.

Generally, buy walls are meant to change the market impression so that it appears that the demand for a particular asset is high to drive the price up. Buy walls have the potential to influence crypto market prices.