Depth Chart

A depth chart is a visual representation of all the open buy orders and sell orders for a particular asset at various price levels. It gives you an instant snapshot of market supply and demand. The left side of the chart shows buyers (called “bids”) and how much they want to buy at different prices, while the right side shows sellers (called “asks”) and how much they’re willing to sell. Where the two sides meet in the middle is roughly the current market price.

The chart typically looks like two mountains or slopes facing each other from either side. The steeper the slope, the more orders are clustered in that price range. A large flat plateau means orders are spread out thinly. Traders use depth charts to gauge market sentiment and to identify potential “walls” — unusually large clusters of buy or sell orders that might act as price barriers. A giant sell wall, for instance, could signal that it will be hard for the price to move higher until all those sell orders are absorbed.

Example: Picture an auction house where buyers are seated on the left and sellers on the right, each holding a sign showing what price they’d accept. The depth chart is like a bird’s-eye view of the whole room — you can instantly see where the crowd is thickest. If there are a hundred people on the sell side all willing to sell at $50,000, that’s a sell wall. The price is going to have a hard time pushing past $50,000 until someone buys up all those sell orders.