Understand the order process and its impact on Bitcoin Trade (BTC)
The cryptocurrency trade world has increased exponentially in recent years, prices fluctuating quickly due to market emotions, economic indicators and regulatory changes. One of the key factors contributing to these price fluctuations is the order flow, which refers to purchase and sales orders at a specific price. In this article, we have plunged the order process and its impact on Bitcoin Trade (BTC).
What is your command flow?
The order flow represents the cumulative amount of purchase and sale orders placed within a period given by merchants and individual institutions. It is essentially an instantaneous of the need for certain assets. The order flow can be classified into different types, including the following:
* Purchase orders
: The green arrows represent the graph below, which represents a device purchase.
* Sales of commands : The red arrows indicate that they represent a device for sale or to liquidate.
Types of command
There are several types of control flows on cryptocurrency exchange:
- Normal Flow of Orders : This is the typical scenario where purchase and sale orders are balanced within a given time.
- Spikes Voatité : During high market volatility periods, purchase and sale orders become more extreme, resulting in higher price fluctuations.
- Market trends : If the price of a device points up or down, the order flow would prefer one direction to another.
Effect on Bitcoin trade
The effect of the flow of orders on the Bitcoin trade can be important:
- Price discovery : The current order determines how prices are covered and resolved on the market. If you have a high price at a certain price, this may indicate that more customers are ready to buy the device and increase the price.
- Market emotions : The direction of the order flow often reflects the emotions of the market. If the majority of traders buy or sell in a direction, this may indicate a strong trend. On the other hand, if there is an imbalance between purchase orders and sales orders, this may indicate a potential turn.
- Risk management : Understanding the order process helps dealers to better manage risks. For example, if a device has high volatility during normal control periods, traders can take advantage of these fluctuations by buying or selling in peaceful periods.
Real examples
Let’s examine some examples to illustrate the effects of the command process on the Bitcoin trade:
- 2017: The “White Whale” effect: in the cryptocurrency of the 2017 cryptocurrency, the individual investor (often called “whale”) bought a BTC worth a value of a Million dollars, creating a BTC, created with a good purchase order that has fueled your price increase.
- 2020: COVID-19 market light : While the global markets responded to the COVID-19 epidemic, Bitcoin fell and an unusually large amount of sales orders flooded the market. This has considerably reduced purchase orders, resulting in a brief correction.
The best practices of traders
To navigate effectively in the order process and its effect on the Bitcoin trade:
- Monitor Monitor exchange data : Stay up to height -with real -time control processes such as Binance, Coinbase or Kraken.
- Use technical indicators : Use devices such as mobile averages, RSI (relative force index) and Bollinger strips to help identify potential trends and inversions.
- Consider the analysis of the emotions on the market : Find changes in the purchase and sale orders which may indicate a change in the emotions of the market.
- Diversify your portfolio : Distribute your investments to various cryptocurrencies to minimize risks.
Conclusion
The order flow is a critical factor to understand the Bitcoin price movements (BTC), influencing its commercial dynamics.
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