An Orderbook is the list of all current open market Buys vs Sells. Sometimes also called “depth”, orderbooks express the liquidty of an asset in both directions.
Whenever inspecting an orderbook, one is able to deduce what kind of market pressure is currently being exerted on an asset. Whenever there is are equal level of BUY/SELL orders then the price will likely be trending sideways (with some wicks in both directions). However, when there is a discrepancy in the orderbook sizing (one side outweighs the other) then price will likely be more volatile.
BUY Case:
If an orderbook has much more BUY orders, then it is likely that the asset is in high demand, OR some interested parties do not want the asset price to fall below a certain level so they provide liquidity as a countermeasure.
SELL Case:
If an orderbook has much more SELL orders, then it is likely that the asset is low demand, OR some interested parties are trying to keep its price from rallying, so they provide selling pressure onto the market.
*** When in attempting to apply Orderbook logic to the crypto markets, it can get very complex, very fast. Due to the pseudonymous nature of crypto, it is common that orderbooks are fictitiously inflated in an attempt to mislead traders. It is considered best practice to minimally rely on Orderbooks as a metric for gauging market health.***