L'INFORMATEUR CRYPTOOrder flow: definition
Order flow analyzes the orders actually executed (who buys, who sells, how aggressively) to understand what moves the price.
Definition
Order flow focuses on transactions rather than price-derived indicators: buy and sell volume, spot and futures CVD, open interest, funding, large orders.
The method in 3 questions
- Who is pushing the price? Spot (investors) or futures (leverage)?
- Is leverage increasing? Is open interest rising with the move?
- Is positioning unbalanced? Extreme funding and long/short ratio?
Example
Price up, spot CVD up, open interest flat, neutral funding: a healthy move driven by real buying. Conversely, price up with spot CVD down and open interest sharply up: a speculative, fragile move.
Frequently asked questions
Does order flow work on small cryptos?
Yes, as long as they have sufficiently liquid spot and futures markets. On a thinly traded token, a few orders are enough to distort the reading.