How order book depth affects a crypto trade
Order book depth shows how much crypto can trade near the current price before it moves. Thin depth makes larger orders slip to worse prices.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- Buy and sell rows show size at each price.
- Thin depth makes large orders slip.
- Depth shifts with news and volatility.
- Keep records and secure your account.
Crypto exchanges match buyers and sellers in an order book. The book's depth tells you how your order will fill. This guide walks through checking depth before a trade and what to save after.
What order book depth means
An order book lists resting buy and sell orders for a trading pair. Each row shows a price and the size available there. Depth is the total size sitting near the current price. It shows how much can trade without moving the price much.
Steps to check depth before trading
Thin depth makes larger orders slip to worse prices; deep depth absorbs them. Check the live book and recent trades before you choose an order size and type. Recheck before each trade because depth changes with volatility, news, and time of day.
- 1Open the live bookFind the buy and sell rows for your trading pair. This shows the size resting at each price now.
- 2Check recent tradesLook at the trades that just filled, not only resting orders. Recent fills show what prices other traders got.
- 3Compare your size to depthIf your order is large next to the rows near the current price, it will slip to worse prices. Small orders against deep rows usually fill near the top.
- 4Choose size, type, and recheckA market order takes the prices on the book, so it can slip in thin depth. A limit order sets the worst price you will accept. Depth can change in seconds, so look again right before you confirm.
After the trade: records and safety
The IRS treats crypto as property, so each trade can create a taxable event. Save the confirmation from each trade. Then secure your exchange account.
Frequently asked questions
Slippage is the difference between the price you expected and the price your order got. It usually happens when the book is thin or the market moves fast.
A limit order sets the worst price you will accept, so it does not fill at a worse price. It may not fill at all if the depth is not there, and part can stay open.
Traders cancel resting orders when prices move fast, and market makers pull back. That leaves fewer buy and sell orders, so the book looks thin.
