Iceberg orders, also known as reverse orders, are commonly utilized by market makers, who are individuals or firms providing bids and offers in the market. These orders are often associated with institutional crypto investors who engage in significant cryptocurrency transactions that can influence the market greatly.
For observers, it may be possible to identify these orders in the order books, but only a small portion of market maker iceberg orders is visible on level-2 order books. In the crypto sphere, level-2 order books display all bids and asks on an exchange, including price, volume, and timestamps, making it a real-time data repository.
Referred to as the iceberg’s tip, only a fraction of the order is visible above the surface, while the majority remains hidden beneath the waterline. Iceberg orders are not commonly used by smaller investors like private traders.
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