Everyone was wondering if you can influence the price movement of an asset. Is it possible to change the course of the coin with your actions, reverse the trend and id. Today we will talk about whales from the world of cryptocurrency, how they got here and much more.
The term “whales” refers to investors who are large holders of digital assets. For example, they include automaker Tesla, which owns 43,000 bitcoins worth $1.7 billion, and software maker MicroStrategy.
In layman’s terms, whales are large holders of a particular asset who keep the market volatile. Transactions of such investors often leave a mark on the chart.
Large holders of cryptocurrencies are usually asset managers and investors who are active in traditional markets, have experience in investing, and also understand market trends.
Small investors are trying to track the movements of “whales” as large holders of digital assets act professionally and choose investment options with the least risk of incurring losses.
Therefore, we can draw a logical conclusion, if the whales sell their assets, exit trades and show bearish activity, we can expect the market to fall soon. This can serve as a good signal to sell or enter other positions.
Impact of whales on the market
Whale activity can have a big impact on the cryptocurrency markets, including individual cryptocurrency prices and market capitalization. When whales make deals, they often do so for tens or even hundreds of millions of dollars.
These massive sell or buy orders can lead to sudden and significant price changes.
When a large buy order is placed, it can raise the price of a particular cryptocurrency because it sends a signal to the market that a particular asset is in high demand.
When the whales create a massive sell order, the price can go in the exact opposite direction because it sends the opposite signal to the market and makes the asset look like it is unclaimed.
It is estimated that about 40% of all Bitcoins are owned by approximately 1,000 people. With so few people owning almost the majority of BTC, any significant buying or selling by these giant investors could tip the Bitcoin market in either direction.
Ability to manipulate whales
The fact that a high percentage of the cryptocurrency markets are owned by a select few whales makes some people fear that cryptocurrencies are ripe for manipulation.
Even if just a few whales conspired together to create a large sell order, they could drastically lower the price of a particular cryptocurrency.
Then all of them will be able to buy this asset at a reduced price and take the cryptocurrency from the so-called “minnows” – small fish – these are people who own a small amount of cryptocurrencies.
There is a debate about manipulation in the cryptocurrency community and there is a wide range of sentiment about it. Some people think that cryptocurrency manipulation is real, others think it’s not, and still others think it could be real, but if it is, it doesn’t really matter.
Regardless of people’s opinion on this matter, it cannot be denied that the cryptocurrency markets go through periods of intense booms and busts.
In fact, the fluctuations in the price of cryptocurrencies are so strong that they make cryptocurrencies one of the most volatile assets in the entire world and therefore one of the riskiest to trade and invest.
There are many ideas about whales in cryptocurrency, but it can be said for sure that they have an impact on market quotes. Good or bad – everyone has their own opinion. However, if it is possible to listen to the opinion of large holders, it is worth doing.
But do not completely trust the opinion of major players. Opinion is good to use as an addition to the main analysis.
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