Whales, Whales, Whales, Blue Whales, Humpback Whales, Killer Whales
And many more types of whales are the biggest animals in the Ocean.
Crypto world is nothing less than an Ocean and Whales are the biggest players of the crypto world. Now, these whales can be Banks, Companies or even an individual. God knows that. These so-called whales have massive crypto wealth.
Our Brother Satoshi Nakamoto has more than a million Bitcoins, right, so he is considered as one of the biggest whales in the crypto world. Whales are infamously known as Market (Price) Manipulators as well. Manipulation isn’t really some people say, some say it is real and some are still thinking what to say.
Just like how actual Whales feed on Krill (One of the smallest crustaceans in Oceans), Crypto Whales feed on newbie traders and sometimes professional traders as well. Whales are like the Market Makers of Forex trading, no one knows what’s going on in their head but they like to feed off the stop losses of the poor traders and make some more money.
Research suggests that 1000 people hold more than 40% of bitcoins in the market(Satoshi are you reading this)
Whales can sometimes create a massive sell or buy orders in order to manipulate the prices. If Whales want to buy a coin at a lower price than the market price they will create a massive sell order due to which the price will fall drastically so that they can buy back the coin at lower prices. In the same way, if they want to sell a coin at a higher price they will create a buy order so that the price spikes suddenly and they will be able to sell their asset.
When Whales enter the market the market becomes very volatile.
How to spot a Whale:
While trading most of them do use order book, a normal human(trader) would enter the market with 5, 10, 20 or even 100 bitcoins. But Whales will enter the market with hundreds or even thousands of bitcoins. When this happens volatility and price spikes or drops are common. Before entering the markets the traders should actively lookout for any Whale movement signs in the order book for unusual bids, this will help in safeguarding the losses. Sometimes things don’t work how the whales desire as well.
For smalltime traders sometimes whales can be a blessing in disguise if the traders are cautious enough then they can make some decent profits with very low risk.
Lookout for whales the next time you trade.