11 Feb Ethereum: What is the strategy behind a sell wall?
Ethereum: What is the strategy behind the sales walls?
In the world of cryptocurrency trade, especially for institutional investors and hedge funds, “Bid Walls” and “Sell Walls” are two strategies that help manage the risk and protect profits. In the case of Ethereum’s octopus Exchange, however, a kind of sales wall was used to keep prices low. But what is behind this strategy and how does it work?
Sell walls against walls
A bid wall is essentially a border order that is placed on a cryptocurrency exchange and the platform proves to buy the assets at a certain price. The purpose of a bid wall is to prevent the price from falling below the target level and thus protecting the buyer’s profit. On the other hand, a sales wall is a border order that the platform proves to sell the assets at a certain price that aims to block profits.
Kraken’s sales wall strategy
At octopuses, the prices for Ethereum (ETH) were kept low by using a sales wall strategy. This means that octopuses, if the ETH prices are near their all-time highs or have considerable volatility, have started buying orders at lower levels to prevent price waste. The volume of this exchange is also relatively low, which limits the potential for a large -scale purchase or sale.
Why sell walls necessary
There are several reasons why sales walls could be employed in the Ethereum trade:
- Market volatility : High market volatility can lead to considerable price fluctuations, which makes it challenging the dealers to predict price movements.
- Risk management : Sales at a lower level helps to manage the risk by saving profits and reducing potential losses.
- Counter attack : Sales at lower prices effectively meet octopuses against market forces and tries to resume prices.
Challenges and restrictions
While sales walls can be effective when managing risks, they also have restrictions:
- Limited profitability : The purchase of ETH at a low level cannot achieve a significant profit for dealers.
- Low market liquidity : The low volume of octopus can restrict the ability to carry out large business or to block profits.
Diploma
In summary, the strategy behind Ethereum’s sales wall is a valuable instrument for managing risks and protecting profits on high -volatility markets. However, it is essential for dealers to understand the boundaries of sales walls and use them carefully to compensate for their risk management approach with market analyzes and trade strategies that complement or counteract these tactics.
recommendations
Consider the following for Ethereum dealers on octopuses:
- Risk management : Use the sales walls as an instrument to manage risks, but are aware of the potential restrictions.
- Market analysis : Continuously monitor ETH prices and adapt your strategy accordingly.
- Commercial strategies : Experiment with different trade strategies that complement or counteract. Sell wall tactics.
By understanding the mechanics behind the sale of walls and the effective use in conjunction with other market analysis techniques, Ethereum dealers can optimize their risk management approach on octopuses and achieve better results in this market with high volatility.
No Comments