An order book tracks all buy and sell orders placed on an exchange for a particular asset. Each asset has its own order book, and updates multiple times a second as traders participate in the markets. This provides a view of the overall sentiment for observers.
Generally speaking, all order books contain the same information but vary slightly in design.
The image below is an example of Binance's ETH/BTC order book. Here, we can see the volume of orders at each price point. Green refers to the buy orders while red indicates sell orders. The system that matches buy orders with sell orders, called the matching engine, uses the order book to execute trades for participants on the exchange.
Interpreting order books might give some insight into the various support and resistance levels. For example, a large number of buy orders around a specific level might indicate a level of support.
A popular visualization of the order book is the depth chart. Based on the example below we can gauge, at a glance, that sell volume is much higher than buy volume.
That being said, it's important to acknowledge the large potential for abuse here. At will, traders can simply place orders to skew the metrics, and then cancel before anything actually goes through. So while the order book is useful, it's not necessarily wise to trade solely off of it.