I don't see ask-side walls as anything but an attempt to lower the price to buy more bitcoins later....
Why else would you do such a thing?
Why else would you do such a thing?
There are at least two more plausible explanations:
2. Someone considers bitcoins overvalued at 21.00 and is willing to part with 25K of his holdings at this price point. He announces this intention publicly to see if there is anyone with an opposite market view willing to be a counter-party for this transaction. Why does not he just sell it all in small portions? Well, in a thinly traded instruments such as BTCUSD it is just impossible. You cannot easily exit big positions without driving the price down quite a bit.
3. A long-term BTC holder is concerned about another short-term bubble-and-burst pattern forming. So he sends a message to whomever pumps the price up to be more careful about it. Once the people see that a lot of bitcoins are available for sale at a specific price point, they'd be less likely to fall for bubble-inducing propaganda such as: "OMG, this is the last change to buy BTC below XX.XX!"
I still think that your initial explanation is right though. Most likely, this is just a phantom scare-wall that's going to disappear once the price gets close to it. But we're not going to find out for sure until someone actually tries to buy into this wall.
Ahh... yeah, #3 inparticular crossed my mind after I posted. If I had a large stake in bitcoins, I might be a bit concerned about two previous run-ups that then resulted in a dramatic collapse.... though, if the price were to reach my $21 wall and start eating a decent sized chunk out of it, I'd still either remove it or move it back a 'safe distance' (or *possibly* if the bids were especially weak, I may consider doing something like a market sell of 500 of those BTC, in hopes of causing a mini-panic in order to buy back at a lower price, doesn't look like it'd be too rough to collapse it to 20.12).
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Even with the very healthy bid side, dumping such an amount of coins would still yield a significant spread. Part of the game is also to sell higher than everybody else does, which doesn't necessarily mean that they gonna buy back. Creating a wall is one of the easiest ways to archive that.
A wall that big simply encourages people to build in asks right in front of it.... someone with that many bitcoins should either hire a broker to do the selling for them, or at least have some means of monitoring it at regular intervals.... so then something like 500 BTC "walls" makes a lot more sense. It also gives you the opportunity to sell the remainder at even higher prices... if someone is going to buy your whole chunk of 12000 or whatever it is at $21, then you probably missed out on some even greater potential profits.(ed: there's also the whole 0.01 sell going on, to make the price look artificially lower)
of course, all this could have a good purpose if there's some way to short sell bitcoins that i'm unaware of
