Supply Walls

Definition ∞ Supply walls are significant concentrations of sell orders placed at specific price levels in a financial market, particularly within digital asset exchanges. These large sell orders act as resistance points, potentially hindering upward price movements as they must be absorbed by buying pressure. They represent areas where substantial supply is available for purchase.
Context ∞ Supply walls are closely monitored by traders and analysts as they can indicate potential price ceilings or points of significant market resistance for digital assets. Their presence can influence trading strategies, as breaking through a substantial supply wall often requires considerable buying volume. Understanding the dynamics of supply walls is key to interpreting price action and assessing the potential for asset price appreciation or consolidation.