Sometimes when the price of BTC goes down or up, traders call bitcoin whales supposed to pump or dump the crypto market. Bitcoin whales are groups or individuals who hold huge amounts of BTC and are believed to be so manipulate market prices with huge buying and selling transactions. Although whales’ market power has diminished as more people own Bitcoin and the value of the cryptocurrency market has increased over the years, whales remain significant in this market. The crypto movements of whales are always newsworthy.
Whales are generally dangerous because they are the largest fish in the sea and eat small marine animals. Crypto whales are also known to eat small traders, so to speak. The more a whale has in total supply of a cryptocurrency, the greater its sphere of influence. For example, if a crypto whale owns 15% of the total supply of LINK and is determined to sell these tokens, the price of LINK will definitely be greatly affected.
In 2015, just a few years after the invention of Bitcoin, a huge BTC whale hit the market. As we have mentioned earlier, is whale effects were very high in markets with low liquidity. The whale probably hoped that selling 30,000 BTC at $300 each would lower the price. Other investors who took advantage of this sell order bought the BTC sold by the whale and continued to buy for a while. As a result, the Bitcoin price hit $400 in the same month.
Whales can manipulate the market without trading BTC
Bitcoin whales are also known to bluff. On cryptocurrency exchanges, buy and sell orders can be created at different prices apart from the spot price. whales who wants the price of Bitcoin to rise or fall can build a wall at a target price by entering a very heavy trade order on very high volume exchanges such as Binance, FTX, OKX or Coinbase. For example, a buy order for 3,000 BTC at a price below the spot price can create a support point for Bitcoin. If the whale is indeed bluffing, it will cancel the trade order when the BTC price approaches the order level.
How much crypto do whales hold?
Cryptocurrency whales often have huge amounts of crypto. 85 Bitcoin wallets currently hold around 15% of BTC in circulation. 8 million BTC, which is almost 42% of the amount of BTC in circulation, also exists in 2200 wallets with the most BTC. That’s $185 billion.
Whales like to buy and sell manipulative and volatile cryptocurrencies like Doge and Shiba Inu for short periods. While 27% of the total amount of Doge in circulation is held in a single wallet, the 15 wallets with the most Doges hold 50% of the circulating supply.
Is Tesla a Bitcoin Whale?
Bitcoin traded at $38,800 when You are here announced on February 8, 2021 that they had bought $1.5 billion worth of Bitcoin. After Tesla’s public announcement, the Bitcoin price rose almost 50% in just 14 days, reaching $57,650.
On July 21, 2022, Tesla announced data for the second quarter of 2022. According to this statement, Tesla sold 75% of its BTC holdings in the past three months. Although Tesla’s statement caused an immediate price drop, the market subsequently returned to the same level. Tesla Is A Bitcoin Whale But Elon Musk’s Speculative Post Using Many Meme Tokens, Especially Doge And Shiba Inu Has Been Reduced Tesla’s influence on the crypto market.
Exchange vs Wallet Transaction
Bitcoin whales use cold wallets to store their money as it is a much safer and more secure solution. The large amount of crypto sent from the exchange to the wallet indicates that the whale does not want to sell this crypto in the short term. If the crypto pulled into the wallet is a stablecoin, this is negative for the price of Bitcoin because the whale has chosen to stay in cash rather than buy Bitcoin.
Wallet to exchange the transaction
This is also important if a Bitcoin whale sends BTC from the wallet to the exchange. Cryptocurrency exchanges are most popular platforms for crypto trading. If a whale sends its BTC to the exchange wallet, it can be considered that it intends to trade it in the short term. And again the situation is different for stablecoins. Sending a large number of stablecoins to the exchange wallet suggests that a whale is preparing to buy another crypto.
Whale Alert is a well-known Twitter account for crypto followers. This account will be shared immediately large crypto transfers occurring in blockchains. If the sender or recipient has a known owner of the wallet, the account tags it in the tweet.
If you have on-chain analysis skills and know how to use blockchain explorers, you can follow large crypto whales and their transactions by means of explorers.
The crypto market does not yet have the controls and regulations that traditional markets are subject to. Although the market is less volatile than in the past, it is still volatile. Market manipulation is a common problem for whales. You should watch the whales and follow their trades, but you should not trade based on those trades alone. You should always make your investment and trading decisions after doing adequate research and using technical and fundamental analysis methods.