How to Read a Crypto Exchange Order Book: Bids, Asks, Spread and Depth Explained

The price you see is not the price you get. An order book is the exchange's live list of every open buy and sell order waiting to be matched. It answers at what prices you can actually execute right now and how much volume is available. It updates in milliseconds. Charts show history, while the book shows the present.

Bids, asks and the two sides of the book
Bids are buy orders, listed highest to lowest. Asks are sell orders, listed lowest to highest. If the best bid is $99,800 and the best ask is $99,850, a market buy fills at $99,850 and a market sell at $99,800. Bids are usually shown in green and asks in red, and each row shows price, size, and often a running total.

The spread
The spread is the gap between the best ask and the best bid. It is the minimum cost of immediacy, paid by every market order on top of commission. In the example above, the absolute spread is $50, about 0.05% of the mid-price of $99,825. Typical BTC/USDT spreads are roughly 0.01-0.03% in peak hours. Above about 0.1% signals thin conditions, and a newly listed low-cap altcoin can exceed 1%. If a spread suddenly doubles, pause.

Depth
The size at each level, stacked together, gives market depth. Deep markets absorb large orders with little movement. Thin markets cause slippage. For example, if the best ask is 100.10 and the next is 100.20, a market buy of 30 takes 15 at 100.10 and 15 at 100.20, averaging 100.15. Check the size within a percent or two of the price and use the running-total column.

Market orders, limit orders and walls
Market orders accept any available price and are most exposed to slippage. Limit orders set a price you will not trade through, avoiding deep fills at the cost of possibly not filling. Buy and sell walls can act as support and resistance, but they can vanish, as orders are intent, not commitment. Hidden orders, OTC desks and internalised flow sit off-book.

A 15-second pre-trade checklist
Check the spread percentage (BTC under about 0.05% is normal, altcoins under about 0.5%), depth at your size (cumulative volume within 0.5% of the best price), timing (tightest in liquid hours), and order type (market for deep books, limit for thin ones). Remember, the book is not a predictor.

FAQ
What is an order book? A live list of open bids and asks ranked by price with size at each level.
What is the spread? The gap between best ask and best bid; tight means liquid, wide means thin.
What is market depth? Total size at each level around the current price.
What causes slippage? A market order larger than the size at the best price walking through worse prices.
Market or limit? Market guarantees execution, not price; limit guarantees price, not execution.
Can a buy wall be trusted? No, orders can be cancelled, and hidden and off-exchange liquidity never appears.

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This article is market news and general information only, not financial advice.