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Ethereum: What is the strategy behind the sales walls?
In the world of cryptocurrency trading, especially among institutional investors and hedging funds, “offer walls” and “sold walls” are two strategies that help manage risk and protect profits. However, in the case of exchange of Kraken Ethereum, the type of sales wall was used to maintain low prices. But what is behind this strategy and how does it work?
Vs. auctional walls Sell the walls
The offer of the offer is essentially a limit order placed on the cryptocurrency exchange, instructing the platform to buy assets at a certain price. The purpose of the offer wall is to prevent a decrease in the price below the destination level, thus protecting the buyer’s profit. On the other hand, the sales wall is a limit order that instructs the platform for sale of assets at a certain price, aimed at blocking profits.
Kracena sales strategy
In Krakenka, the prices of Ethereum (ETH) were low thanks to the use of the sales strategy. This means that when ETH prices are close to their highest levels or experience significant variability, Kraken placed orders at lower levels to prevent price drops. The volume of this exchange is also relatively low, which limits the potential for large -scale purchase or sale.
Why sell walls
There are several reasons why walls can be employed in Ethereum Trading:
- Market variability : High market variability can lead to significant price fluctuations, which makes traders difficult to predict price movements.
- Risk management : sales at lower levels helps to manage risk, blocking profits and reducing potential losses.
- counterattack : By selling at lower prices, Kraken effectively counterattacks against market forces, trying to undo prices.
Challenges and restrictions
Although sales walls can be effective in risk management, they also have restrictions:
- limited profitability : Buying ETH at low levels may not generate significant profits for traders.
- Low market liquidity
: Low volume on Kraken may limit the possibility of large -scale transactions or blocking profits.
Application
To sum up, the strategy standing behind the Ethereum sales wall is a valuable tool for risk management and profit protection on markets with a large amount of freedom. However, it is necessary for traders to understand the restrictions on the sale of walls and the court to use them, balancing the risk management approach using market analysis and commercial strategies that complement or counteract these tactics.
Recommendations
In the case of Ethereum traders in Kraken, consider the following:
- Risk management : Use sales walls as risk management tools, but remember about potential restrictions.
- Market analysis : Continuous monitoring of ETH prices and adjust your strategy accordingly.
- Trade strategies : Experiment with various trade strategies that complement or counteract wall sales tactics.
Understanding mechanics standing behind the sales walls and effective use of them in combination with other market analysis techniques, Ethereum traders in Kraken can optimize the approach to risk management and achieve better results in this market with high freedom.
