I often came across the term sell wall when browsing steemit or other cryptocurrency news sites. It took me a bit to really understand what sell walls are and what they are used for. With this post I hope to help some others out there to better understand the term sell wall.

What is a sell wall

Sell walls are used by groups or an individuals to manipulate the price of a currency (or a stock) downwards. They place a large sell order at a specific price and with this they prevent other sell orders with a higher price from getting full filled.
The goal of this is to buy a coin (or a stock) below the actual market price.

This might look like this. source

How does a sell wall work

A wealthy person, let's call him Bob wants to buy 2M worth of coin X. If he were to buy them all at once, this would push up the price. So he decides to sell 1M of coin X for the price he wants to buy the 2M for (e. g. $2).
This sell order is huge and prevents higher sell orders to full fill. If others want to sell their coins too, they have to set the price lower than $2. This drives the price down and causes panic selling. The volume traded is now so high that Bob can buy 2M coins without pushing up the price!

Note

Always make sure to check if the downtrend is caused by a sell wall. In this case, panic selling only leads to losses. Keep a cool head and wait until the sell wall is broken. The price will then correct itself completely automatically.