Order Books and Market Depth: How to Read Liquidity Before You Trade

Order books and market depth are visible on every exchange's trading screen, but they are easy to ignore until an order fills at a worse price than expected. Reading them takes a few minutes to learn and can change how you size and place orders.

What an Order Book Shows

An order book lists every open buy order (bids) and sell order (asks) for a market, ranked by price. Bids sit below the current price, asks sit above it, and the gap between the best bid and best ask is the spread. Each price level also shows the size of orders waiting there.

What Market Depth Means

Market depth is the total size available at each price level, in both directions. A market with deep liquidity has large amounts of size stacked close to the current price, so a sizeable order can fill without moving the price much. A thin market has little size nearby, so the same order pushes through several price levels to fill.

Reading Depth Before You Place an Order

Look at how much size sits within a percent or two of the current price. If your order is small relative to that size, it should fill close to the displayed price. If your order is large relative to it, expect the fill price to move as it works through the book, which is the mechanism behind slippage.

Why Depth Varies by Market

Depth depends on how many traders are actively quoting a given pair. Widely traded pairs on Bitval typically carry deeper books than newer or less popular listings, so the same order size behaves differently depending on which market it is placed in.

Depth and Order Type

A market order accepts whatever price is available, so it is most exposed to thin depth. A limit order sets a price you will not trade through, so you can use it to avoid filling deep into a thin book, at the cost of the order possibly not filling at all. Bitval supports both order types on spot markets.

A Quick Habit Worth Building

Before placing a larger order, glance at the book: is there enough size near the current price to absorb it comfortably, or would it need to reach several levels down? That one check takes seconds and tells you whether to expect a clean fill or a sizeable difference between order price and the average price of the fill.

You can create a Bitval account to see live order books on Bitval's markets.

This article is for informational purposes only and does not constitute financial advice. Trading crypto carries risk, including the loss of your capital.