Most centralised exchanges match trades using an order book. It has two sides: bids, the offers to buy at various prices, and asks, the offers to sell. The exchange arranges them by price, so you can see the highest anyone will currently pay and the lowest anyone will currently accept. A trade happens when a buy order and a sell order meet at the same price. The distance between the best available bid and the best available ask is known as the spread.
Reading an order book gives a quick sense of supply, demand and depth. Lots of orders stacked close together means a deep, liquid market where large trades can fill without moving the price much. A thin order book with big gaps means low liquidity, where even a modest order can jump the price, an important warning for smaller coins.
It is worth knowing that not every market uses one. Decentralised exchanges built on automated market makers price trades from liquidity pools instead of an order book. But for centralised trading, the order book remains the classic mechanism, and understanding it demystifies terms like spread, slippage and market depth. Depth charts, which visualise how many orders sit at each price, are a common way traders size up that liquidity at a glance.
How to Read a Crypto Price Chart
Key takeaways
- An order book lists live buy orders (bids) and sell orders (asks) organised by price.
- A trade executes when a bid and ask meet; the gap between the best of each is the spread.
- A deep order book signals good liquidity, while a thin one warns that trades can move the price sharply.
Order Book — häufig gestellte Fragen
What is the spread in an order book?
It is the gap between the highest price a buyer will pay and the lowest a seller will accept. A narrow spread usually indicates a liquid, actively traded market, while a wide spread suggests thin trading.
Do all exchanges use an order book?
No. Centralised exchanges typically do, but decentralised exchanges based on automated market makers price trades from liquidity pools instead. Both let you trade; they just match buyers and sellers differently.
Related terms
Centralised Exchange (CEX)LiquiditySlippageDecentralised Exchange (DEX)Arbitrage Alle Begriffe →New to crypto, or filling in the gaps? Work through the essentials in Learn, browse every term A–Z, or see live prices for the coins these concepts power.