Buying on Top of Buy Walls

What are buy walls?

Buy walls are large concentrations of liquidity sitting below the current price. In DeFi, they form from:

• Limit buy orders clustered at similar price levels
• LPs concentrating liquidity in specific price ranges
• Large players accumulating tokens

These walls act as support. Price has to eat through all that liquidity to keep falling, which makes them good entry points.

CLOBr showing a significant buy wall

Spotting buy walls in CLOBr

1. Open CLOBr and select your token (e.g., BONK)

2. Look for long gray bars below current price in the liquidity depth chart. The longer the bar, the stronger the wall.

3. Compare to Constant Product Liquidity Toggle the "CP" button to find out if this wall is more of a speed bump or a true liquidity barrier. A true barrier will be 10x or more of Constant Product Liquidity.

4. Verify wall stability by examining pair exposure (as covered in Analyzing Pair Exposure). Walls with stablecoin exposure tend to be more reliable than those composed of volatile tokens.

5. Monitor the wall over time. Persistent walls that remain in place for days or weeks are more reliable than newly formed ones.

The trade

Basic setup

1. Identify a token with a significant buy wall within 5-10% below current price
2. Wait for the price to approach the wall (within 1-2%)
3. Enter a long position near the top of the wall
4. Set a stop loss slightly below the buy wall (in case it breaks)
5. Target exit near the next significant sell wall identified in CLOBr

Wall bounce plays

Shorter-term version: play the bounce off a strong buy wall.

1. Find a token where price is actively approaching a large buy wall
2. Wait for the first touch or slight penetration of the wall (price typically "bounces" on first test)
3. Enter a position as the bounce begins to form (watch for reversal candlestick patterns)
4. Set a tight stop loss below the wall
5. Take profit quickly (3-5% move) rather than waiting for larger gains
6. Consider scaling out of the position in parts as the price moves up

Risk management

Buy walls aren't guaranteed to hold. When they break, it gets ugly fast.

• Always use stop losses below the wall. A broken wall cascades as other stops trigger.
• Check pair exposure. Walls backed by stablecoins or SOL hold better than volatile token walls.
• Watch for wall erosion. If the wall is shrinking in CLOBr, someone's pulling liquidity or selling into it. Support is weakening.
• Think about market context. Walls break more often during broad downturns or bad token-specific news.
• Size accordingly. Strong wall or not, don't bet the farm.

When to skip it

Don't force this trade when:

• The broader market is in a strong downtrend (walls are more likely to break)
• The token has just experienced negative fundamental news
• The buy wall is very thin or composed primarily of volatile tokens
• The wall has been tested multiple times already (walls weaken with each test)
• There's an unusually large sell wall just above the current price (indicating strong selling pressure and limited upside)

Summary

Buy walls show support levels that aren't visible on price charts. Use them as entry points with stop losses below the wall.

Walls aren't guaranteed to hold. Always use stops and consider the broader market.