🐋 More about Whales

Who Are They? What Impact Do They Have On The Market? How Do You Track Them? Find out with MMPro.

According to blockchain analytics Glassnode, Currently, whales own as much as 8.69M BTC, or 45.6% of Bitcoin’s total supply {21M #BTC}. Earlier this week, Whale activity shows that they are adding to their balance aggressively, acquiring 140K Bitcoin per month directly from exchanges.

To help us understand how much Whales can affect the crypto market, we need to first know who whales are.

🔺 Whales are entities — could be an individual, an institution or an exchange that holds significant amounts of a particular cryptocurrency. Take Bitcoin as an example. A whale is an account that holds 1K Bitcoins or more.

A popular — yet widely speculated — whale is #SatoshiNakamoto, who is said to have mined over a million Bitcoins. Some other examples of well-known whales include Pantera Capital and Fortress Investment Group.

🔺 What Impact Do Whales Have On The Market?

Because of the massive amounts of cryptocurrency a whale may hold, any movements they make could lead to large price fluctuations.

▫️ A whale could put up a massive order to sell a huge chunk of their crypto tokens while keeping the price lower than other sell orders. That causes volatility, resulting in the general reduction of prices of the token or coin. This is followed by a chain reaction where people panic and start selling their tokens or coins at a cheaper price too. As a result, whales are able to buy more coins at a lower price, thus achieving more power. If a whale makes a large transaction, ‘whale watchers’ may respond by taking similar actions, leading to even more price drop.

▫️ On the flip side, Whales also have the power to create a desire for cryptocurrency tokens, by creating a massive amount of buy orders. Thus urging people to raise their bids. In doing so, they also catch the attention of other investors who fear missing out on great, profitable deals. Such Investors see the buy orders and feel that the demand for the token has gone up, and try to get a piece of it. This way, whales are able to sell some of their tokens for a decent profit.

▫️ Whales create a ripple effect that impacts the other investors. By increasing and decreasing prices, they are able to manipulate the market in their favor. As crypto traders, you must give due attention to the movement of whales.

🔺 How Do You Track Whales?

Despite Bitcoin’s global and decentralized nature, tracking down and monitoring whales simply boils down to accessing readily available trading data from crypto exchanges and services. There are four primary ways to track whale activities, which include:

▪️ Monitoring known whale addresses and order books.

▪️ Engaging in a Blockchain analysis to keep track of accounts with a high valuation of crypto tokens.

▪️ Taking note of sudden changes in market capitalization

▪️ Paying attention to trades on crypto exchanges and following Whale alerts on Twitter and other social media platforms

Keeping track of market changes via order books and trades on crypto exchanges indicates incoming whale trades, which can be leveraged to profit during volatility. Moreover, monitoring known whales could provide a headstart to smaller investors as the likeliness of coming across a whale trade increases significantly.

Wanna read more interesting topics on crypto from MMPro? Stay tuned!