Sell Wall

A sell wall refers to a large limit sell order or a cluster of sell orders at a specific price point on a cryptocurrency exchange. It represents a significant obstacle for the price of a cryptocurrency to surpass because, until the sell orders at that price are fulfilled, the price is likely to remain stagnant or face resistance.

Example:

Let's say the current price of a cryptocurrency is $100, and there is a sell wall at $110. This means that there are a substantial number of sell orders placed at $110. As buyers attempt to push the price higher, they encounter this sell wall, which prevents the price from rising beyond $110 until all the sell orders at that price are fulfilled.

Case:

In a scenario where a cryptocurrency experiences a rapid price increase, traders may set up sell walls at key resistance levels to capitalize on short-term gains. These sell walls can act as psychological barriers, influencing trader behavior and market sentiment. If the buy pressure is strong enough to overcome the sell wall, it may indicate a bullish trend reversal. However, if the sell wall holds, it could signal continued downward pressure on the price.