What’s an exchange? An exchange is basically an automated market. Any market has both sellers and buyers, and the same applies for exchanges.
If you bought a bitcoin for USD4,000, it obviously means that someone sold it to you at that price.
However, an exchange is complicated in that it allows you to buy an asset for its current market price i.e. USD4,000, but also allows you to place an order to buy it for, say, USD3,500. When an exchange will match the price you offered, it will find a seller for the asset you want to buy.
There’s always an active side of the deal – either the one who is buying or the one who is selling, at the current market price.
Sell Market deals
It’s quite straightforward – if I go to an exchange to sell an asset, I am the active side of this deal and sell my asset for the current market price. There may be many reasons for this – I might need tangible money for a certain reason or I might think that my asset will depreciate in the near future and that I should sell one coin to buy a different coin.
Buy Market deals
Now let’s assume I go to an exchange to urgently buy an asset. In this case, I am still the active side of the deal but I am the buyer. I hope that the price will go up (and go up quickly), and that is why I can’t afford to wait for my order to be fulfilled. Again, there might be many reasons to buy an asset at its current market price.
A high number of Buy Market deals shows that small investors are interested in buying assets right now, while big institutional purchases are fulfilled with the use of delayed orders.
If you see a high number of Sell Market deals, it is a clear indicator that there is panic on the market.
To sum up, the Buy Market demonstrates the number of deals with an active side involved, and we believe that this is a very important indicator of the mood dominating crypto exchanges at a given moment.