> Meanwhile you don't seem to understand why it is remarkable that the market can absorb a huge order that should move the market because of its sheer size while much smaller order have a much larger impact.
Is the concept of an orderbook so foreign to non-finance/math people? Firstly, 13k is not a "huge" order. Secondly, someone clearly just had a somewhat large maker order placed at $1 for the example cited which absorbed a few orders, and the book was thinner for a subsequent price movement (liquidity vacuum). Explained by the market being low volume, low volatility, likely dominated by a handful of traders/algos, and plain old random variation (individual players' orders have a more significant effect in low volume markets like Tether/USD). It's also important to note that psychological price levels (like 1.0) tend to accumulate larger walls as a result of human nature. For Tether in particular, it makes sense that the price never breaches 1.0. It's an easy short above 1.0, as it is impossible for Tether to ever become worth more than the price it is pegged at, whereas it could become worth less if it were insolvent. So there is probably a huge wall sitting there on every exchange.
I used to write trading systems for market makers, and still have friends in the business. I also have friends who are professors, including a finance professor. Trading is not really about market knowledge; it's a skill and an orientation. Being a professor is much more about knowledge, but it's also about skills and orientation. They're different kinds of people, doing very different work.
Your "the only people who can possibly understand this are the ones who agree with me" approach is essentially religious thinking. You're making an argument from authority, except the only cited expert is you, an anonymous person with no credentials and no provable experience.
This applies to journalism at large, but for market and trading analysis in particular, professors fit into this category much more than in other fields (such as engineering, where there is still a disconnect between academia and industry). In trading, anyone who truly understands the market at such a powerful level is using that knowledge to make money. It's a complex adaptive system, so publishing financially actionable research in the field is usually pointless because the market adapts. In my anecdotal experience, even engineers / employees of quant funds like yourself do not often really understand the market when they were focused on some specific piece of infrastructure / a part of someone else's larger design. When left alone without the infrastructure and systems they were used to, breaking even is often their best case scenario.
But this is all beside the point. Instead of personal attacks, getting defensive, and bowing to credentials, consider thinking for yourself and addressing the content, if you reply.
Source: I'm an anonymous professional trader who beats the market.
Everything they have highlighted in the red and green graphs in the latter half of the article can be explained by a completely ordinary order flow. Much weirder stuff happens in the order books every day: iceberg orders that appear small but are bottomless, giant walls that retreat as soon as they're touched, spoof orders that are placed and canceled repeatedly. None of that funny stuff is in evidence here.
Let's focus on one particular error from the article and I'll explain the misunderstanding behind it. Take a look at the diagram titled "Tether-USD Trades on May 9 From 20:59:13 to 21:01:00 GMT." If you don't understand the two prices of a limit order book, you might think that diagram shows 7 different price movements. But in fact, there are only two price movements: when the Ask price moves from .9991 to .9992, and when the Ask price moves from .9992 back to .9991. Something to remember about limit order books: market buy orders will execute at the Ask price, which is at least one increment higher than the Bid price. Market sell orders will execute at the Bid price, which is at least one increment lower than the Ask price. Why can't the Ask and Bid prices be the same? If you had a limit buy order on the books at $100 and a limit sell order on the books also at $100, they match to each other, cancelling each other out until only one type of order (buy or sell) is left at the contested price. When looking at a price history graph like this, what is actually plotted is the Last Executed Price. If the Bid and Ask prices are completely static, the price history will show oscillation between the Bid and Ask prices as market buy orders and market sell orders are executed in turn. The gap between the Bid and Ask prices at a point in time in the order book is called the Bid-Ask Spread. An important point is that when the Bid and Ask are not moving, the Last Price graph will still show oscillation across the Bid-Ask Spread.
So now look again to the diagram caption: "Multiple sell orders of exactly 13,076.389 are executed, and the price didn’t budge..." What this means is that there was more than 183,076.46 in buy limit orders at the Bid price of $0.9990, which is fairly typical to witness. Certainly not evidence of manipulation or even out of the ordinary. The second caption "...but a buy order of just 75 moved the price up .0001" is more problematic. Neither the Bid price nor Ask price has actually moved in response to the size 75 order, this is just the normal oscillation across the Bid-Ask Spread. Furthermore the minimum price increment on Kraken is 0.0001, so the minimum any buy order following a sell order can move the Last Price is 0.0001 (barring a simultaneous drop in the Ask price.) Let me repeat: Unless the Ask price drops, any and all buy orders following a sell must move this price graph upward by at least .0001 by definition. This appears to be lost on the authors, who highlight the .0001 move upward as something notable, an outsized price move for such a small order. They might be shocked to discover that a size 0.01 order would also move the price graph upward as much as the size 75 order.
It's disappointing that Bloomberg, an ordinarily reputable news source when it comes to financial writing, missed the mark by so much on this topic.
I was also disappointed that this article made it to publishing on Bloomberg for the same reason.
So you are suggesting that the experts who were cited in the article, whose field of expertise is this very thing, do not understand how markets work?
Meanwhile you don't seem to understand why it is remarkable that the market can absorb a huge order that should move the market because of its sheer size while much smaller order have a much larger impact. When a buy order of quantity 37.5 moves the price by 0.0002, but the following buy order of quantity 13,076.389, that is almost 350 times the size of the previous order, moves the market by half of that, something is very strange about the liquidity situation.