Whales are responsible for sudden price fluctuations in the traditional and cryptocurrency markets from time to time. Given its ability to manipulate market prices, it is paramount that general Bitcoin (BTC) investors understand the nuances that make one a whale and its overall impact on trading.
Wallet addresses that contain large amounts of BTC are identified as Bitcoin whales. Dumping or transferring large amounts of BTC from one wallet to another negatively impacts prices, resulting in losses for small traders. As a result, tracking Bitcoin whales in real time allows small traders to make profitable trades in the midst of a fluctuating market.
Despite the global and decentralized nature of Bitcoin, tracking and monitoring whales boils down to simply accessing trade data available from cryptocurrency exchanges and services. There are four main ways to track cybercriminal activities, including monitoring the addresses of known cybercriminals, order books, sudden changes in market capitalization, and trading on cryptocurrency exchanges.
Tracking known whales provides an advantage to small investors as the probability of coming across a whale trade is significantly increased. Additionally, tracking market changes through order books and trades on cryptocurrency exchanges indicates the arrival of whale trades, which can be leveraged for profit during volatility.
3,463 #BTC (73,208,868 USD) transferred from #Coinbase to unknown wallethttps://t.co/fD08jpYD4P
— Whale Alert (@whale_alert) July 16, 2022
The crypto community also uses free services that inform investors of successful whale trades, often including information about the sender’s and receiver’s wallets and the amount. One of the most popular services for automatically tracking whale trades is @whale_alert on Twitter, which issues alerts related to large trades, as shown above.
In a recent market update, Cointelegraph revealed that on-chain data suggested that the biggest Bitcoin holders were reluctant to act at current prices. BlockTrends analyst Caue Oliveira supported the above finding by highlighting an ongoing “hibernation” among whale wallets. He added:
“Institutional movements, or commonly called ‘whale activity,’ can be tracked based on transaction volume moved over a short period of time, both denominated in BTC and USD.”
Additionally, numerous altcoins continue to mimic Bitcoin’s bearish trends as whales await a greener sentiment in the crypto market.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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