<p>Your current understanding is correct, but incomplete. If the current price of bitcoin is $50k, no one has open offers to sell at $49k. Instead, there will exist buy offers at $49k. When a seller looks at the market and sees zero offers above $50k, and they still want to sell, they will have to accept the $49k offer, moving the price down to $49k.</p>
<p><strong>Check out <a href="https://river.com/learn/how-is-the-bitcoin-price-determined/" rel="nofollow noreferrer">this article</a> to learn more about how the price of Bitcoin is set.</strong></p>
<p>There are two types of orders: <a href="https://river.com/learn/terms/m/market-order/" rel="nofollow noreferrer">market orders</a> and <a href="https://river.com/learn/terms/l/limit-order/" rel="nofollow noreferrer">limit orders</a>. A market order executes immediately as it accepts the best open offer on the market. For example, if sellers have 3 open offers to sell at $47k, $48k, and $49k and a buyer places a market order, the market order will be matched with the $47k offer. These open offers are limit orders, and they do not execute immediately, but wait until a market order matches with them.</p>
<p>You can read more about <a href="https://river.com/learn/what-is-market-making/" rel="nofollow noreferrer">Market Making</a> as well.</p>

CC BY-SA 4.0
2022-01-26T07:23:50.627Z
2022-01-26T07:23:50.627Z
Sachin Meier
<p>If the price of bitcoin is $50,000, there will be lots of people willing to buy a bitcoin for $49,000 and lots of people willing to sell a bitcoin for $51,000.</p>
<p>Now, say the price of bitcoin is $50,000 and lots of people come along and buy bitcoins for $50,000. Eventually, there will be nobody left selling at $50,000 and you'll have to talk to the people selling at $51,000. The price just went up.</p>
<p>Or say the price of bitcoin is $50,000 and lots of people come along and sell bitcoins for $50,000. Eventually, there will be nobody left buying at $50,000 and you'll have to deal with the people buying for $49,000. The price just went down.</p>
<p>When the demand from buyers (or sellers) exceeds the supply of sellers (or buyers) at the current price, the price will move up (or down) as people continue to buy (or sell) at the new price.</p>

CC BY-SA 4.0
2022-01-26T11:10:42.477Z
2022-01-26T11:10:42.477Z
David Schwartz
<p>According to <a href="https://bitcoin.stackexchange.com/questions/2566/how-is-the-exchange-rate-for-bitcoin-established">How is the exchange rate for Bitcoin established?</a> and <a href="https://bitcoin.stackexchange.com/questions/20383/how-do-bitcoin-exchanges-set-prices">How do bitcoin exchanges set prices?</a> I understood that ,</p>
<blockquote>
<p>An exchange doesn't set a price at all. It provides a framework for
customers to buy and sell coins to each other, at whatever prices the
buyers and sellers find mutually agreeable. The exchange itself does
not buy or sell, and the prices it quotes are just a report of what
its customers are doing right now Credit: Nate Eldredge</p>
</blockquote>
<p>Still, I have questions.</p>
<p>Within the last few weeks, bitcoin drops to $33,000 from $50,000. Even before it went maximum of $69,000.</p>
<p>Just assume the current price of bitcoin is $50,000. According to what I understood, to it becomes $49,000 someone needs to buy bitcoin for $49,000, and someone needs to sell him to for $49,000.</p>
<p>There will be a lot of people who need bitcoin for $49,000 since the current price is $50,000. But who wants to sell bitcoin for $49,000 instead of $50,000 since the current price is $50,000.</p>
<p>For example, if I check the open orders of exchange like Binance, all open buy orders are below the market price and all open sell orders are above the market price. So I can't understand how the bitcoin price is dropping?</p>

<exchanges><exchange-rate>
Confusion of Bitcoin Exchange Rate
Ruwana
# Confusion of Bitcoin Exchange Rate

(Asked by: username_0 on 2022-01-25)

According to [How is the exchange rate for Bitcoin established?](https://bitcoin.stackexchange.com/questions/2566/how-is-the-exchange-rate-for-bitcoin-established) and [How do bitcoin exchanges set prices?](https://bitcoin.stackexchange.com/questions/20383/how-do-bitcoin-exchanges-set-prices) I understood that ,

> An exchange doesn't set a price at all. It provides a framework for
> customers to buy and sell coins to each other, at whatever prices the
> buyers and sellers find mutually agreeable. The exchange itself does
> not buy or sell, and the prices it quotes are just a report of what
> its customers are doing right now Credit: Nate Eldredge

Still, I have questions.

Within the last few weeks, bitcoin drops to $33,000 from $50,000. Even before it went maximum of $69,000.

Just assume the current price of bitcoin is $50,000. According to what I understood, to it becomes $49,000 someone needs to buy bitcoin for $49,000, and someone needs to sell him to for $49,000.

There will be a lot of people who need bitcoin for $49,000 since the current price is $50,000. But who wants to sell bitcoin for $49,000 instead of $50,000 since the current price is $50,000.

For example, if I check the open orders of exchange like Binance, all open buy orders are below the market price and all open sell orders are above the market price. So I can't understand how the bitcoin price is dropping?

**Tags:** exchanges, exchange-rate


---

## 2 answers

### Answer by username_1 on 2022-01-26. Score: 2 | Accepted answer

Your current understanding is correct, but incomplete. If the current price of bitcoin is $50k, no one has open offers to sell at $49k. Instead, there will exist buy offers at $49k. When a seller looks at the market and sees zero offers above $50k, and they still want to sell, they will have to accept the $49k offer, moving the price down to $49k.

**Check out [this article](https://river.com/learn/how-is-the-bitcoin-price-determined/) to learn more about how the price of Bitcoin is set.**

There are two types of orders: [market orders](https://river.com/learn/terms/m/market-order/) and [limit orders](https://river.com/learn/terms/l/limit-order/). A market order executes immediately as it accepts the best open offer on the market. For example, if sellers have 3 open offers to sell at $47k, $48k, and $49k and a buyer places a market order, the market order will be matched with the $47k offer. These open offers are limit orders, and they do not execute immediately, but wait until a market order matches with them.

You can read more about [Market Making](https://river.com/learn/what-is-market-making/) as well.


---

### Answer by username_2 on 2022-01-26. Score: 1

If the price of bitcoin is $50,000, there will be lots of people willing to buy a bitcoin for $49,000 and lots of people willing to sell a bitcoin for $51,000.

Now, say the price of bitcoin is $50,000 and lots of people come along and buy bitcoins for $50,000. Eventually, there will be nobody left selling at $50,000 and you'll have to talk to the people selling at $51,000. The price just went up.

Or say the price of bitcoin is $50,000 and lots of people come along and sell bitcoins for $50,000. Eventually, there will be nobody left buying at $50,000 and you'll have to deal with the people buying for $49,000. The price just went down.

When the demand from buyers (or sellers) exceeds the supply of sellers (or buyers) at the current price, the price will move up (or down) as people continue to buy (or sell) at the new price.


---

