What Is a Crypto Depth Chart? How to Use It?

In crypto assets trading, the Depth Chart is a key tool for measuring market liquidity and buying and selling strength. It visually displays the distribution of buy and sell orders at a specific moment, helping traders to anticipate. Price Trend And develop strategies.

Core Components of the Depth Chart

• Horizontal Axis: Represents the price of the orders, with the center point usually being the current buy-sell midpoint
• Vertical Axis: Represents the cumulative quantity of orders
• Left Green Area: Aggregation of buy orders, the larger the area, the stronger the buying power
• Right Red Area: Aggregation of sell orders, the larger the area, the heavier the selling pressure

Practical Application Value of the Depth Chart

1. Liquidity Assessment: When the green area is significantly larger than the red area, it indicates that buyers are dominant, increasing the probability of price rise; conversely, the risk of price decline increases.
2. Volatility Prediction: A smooth zigzag indicates that orders are dense at various price levels, leading to small price fluctuations; a stepped pattern indicates sparse orders, which can easily lead to significant volatility.
3. Trading Decision Support: Large traders can use the depth chart to find the best entry price, reducing slippage costs. For example, if a buy order of 10,000 SOL is found on Gate’s depth chart, the thicker the right-side sell order area, the lower the overall transaction cost.

Taking Gate as an Example: Depth Chart Operation Guide

In the Gate.io trading page, the depth chart is displayed alongside K-line and real-time order list, allowing users to strengthen their analysis through the following features:

1. Multi-mode Switching: Supports three view modes: individual / cumulative / combined, to adapt to different analysis needs.
2. Cross-Exchange Comparison: For example, by selecting other exchanges’ trading pairs of the same coin in the secondary market dropdown menu, multiple exchanges’ depth can be displayed on top of each other, using different colors to distinguish liquidity sources.
3. Personal Order Positioning: The user’s unfilled limit orders will be marked with yellow circles on the corresponding price axis, making it easy to track the position of pending orders.
4. AI Enhanced Analysis: Combining Gate.io’s innovative smart support and resistance line function, the AI algorithm identifies key support/resistance levels to assist in setting take profit and stop-loss points.

Usage Precautions

• Beware of false orders: Depth chart data only reflects unfilled orders. Market makers may intentionally place large orders to induce market sentiment, so caution is especially needed for small coins.
• Combine with other indicators: Always observe trading volume, K-line patterns, and market news simultaneously to avoid relying solely on depth chart decisions.
• Dynamic monitoring: Gate’s depth chart updates every second, and it is recommended to enable the price alert feature to track sudden changes in real-time.

The value of the Depth chart lies in transforming complex order data into an intuitive battlefield map. On platforms like Gate that support multiple modes and AI analysis, it has become a core decision-making tool from retail investors to institutions.