An order block is a zone on a price chart that marks where buying or selling appears to have concentrated immediately before a strong move. The idea comes from "smart money" chart reading: if a large participant built a position there, price may react when it comes back to the same area.
How a block is identified
Definitions vary between chart-readers, so it helps to be exact about the one our technical reads use. A bullish order block is the last down-candle before an upward burst that breaks the prior swing high; the zone is that candle's full range, wicks included. A bearish order block is the mirror image: the last up-candle before a downward burst that breaks the prior swing low.
The three attributes worth reading
- Mitigated or unmitigated. A block is unmitigated while price has not traded back into it since it formed. Once price trades into the zone it is mitigated and normally drops off the map. Our reads list unmitigated zones only.
- Age in bars. Zones are dated in candles, not days. Seven bars on a 3-day chart is about three weeks; seven bars on a monthly chart is more than half a year.
- Width as a share of price. A zone spanning 2% of price is a specific reference; one spanning 20% is a loose one.
What an order block is not
It is not a forecast. A block describes where orders concentrated in the past. Whether price reacts on a return is exactly the uncertain part, and zones are frequently traded straight through. That is why we report the distance from price to each zone and its age, rather than treating a zone as a level that "should" hold.
In MoonWire analysis
Every weekly multi-timeframe read lists the nearest unmitigated bullish and bearish blocks per timeframe, with age and distance to price. For a worked history of real zones followed week by week, including one that was mitigated, see our explainer What Is an Order Block in Crypto?