Crypto Limit Order vs. Market Order: Which to Use - Crypto.com International

What’s an order book and how do crypto trades work?

An order book is a list of orders to buy and sell a cryptocurrency on an exchange. It shows the prices traders are willing to accept and the amounts they want to trade. Buyers make offers, sellers name their prices and trades happen when those prices match.

An order book has two sides:

• Bids: Buy orders showing how much buyers are willing to pay for a cryptocurrency.
• Asks: Sell orders showing how much sellers want to receive.

The highest bid is the most a buyer currently offers. The lowest ask is the cheapest price at which someone is currently willing to sell. The difference between these two prices is called the bid-ask spread.

Understanding the bid-ask spread

Let’s say a cryptocurrency has the following prices:

If you want to buy immediately, you’d look at the $100.20 asking price. If you want to sell immediately, you’d look at the $100 bidding price.

The spread isn’t fixed. It can change as traders place, cancel or complete orders. A narrow spread often points to an active market, while a wider spread can suggest lower liquidity or more uncertainty about the price.

What’s market depth?

Market depth shows how much crypto is available to buy or sell at different prices. Here’s an example of how that works: