There is a special category of participants in the cryptocurrency environment called crypto whales. These are investors or organizations that own such large volumes of digital assets that their transactions can lead to sharp fluctuations in the rates of Bitcoin, Ethereum, and other cryptocurrencies. When such whales in cryptocurrency begin to act actively, the market can change its direction in just a few hours.

Who are crypto whales and why are they called that

The term “crypto whales” came to the market from traditional finance, where large participants were often called whales. They were compared to ocean giants, whose swimming raises waves and carries the entire ecosystem with them. In the crypto market, this image has become even more entrenched, because volatility here is much higher, and liquidity on many assets is lower than on stock exchanges.

A crypto whale is an investor or fund that owns large amounts of any cryptocurrency. Most often, the term is applied to owners of tens of thousands of BTC or ETH. At the same time, there are no specific numbers starting from which an investor is considered a crypto whale. It all depends on the overall market size of a particular coin. But, as a rule, crypto whales in Bitcoin mean holders of 1000 BTC and above.

Where do crypto whales come from

Today, there are several categories of large holders on the market:

• The first miners and Bitcoin enthusiasts.
  In 2009-2013, Bitcoin was mined at a fraction of the cost and was worth less than a dollar. Some early believers in the technology managed to accumulate tens and hundreds of thousands of BTC, making them the largest crypto whales.

• Institutional investors and funds.
  An example is the Grayscale Bitcoin Trust, which holds hundreds of thousands of bitcoins. These funds buy BTC for long-term holding and capital diversification.

• Public companies.
  Such as MicroStrategy, which acquired over 193,000 BTC, becoming one of the largest Bitcoin whales in the world.

• Crypto exchanges.
  Their cold wallets store users' assets, which automatically makes the exchanges the largest holders of BTC. Although they are not formally the owners, their movements of funds also affect the market.

• Funds and family offices of the super-rich.
  These are hidden crypto whales who buy bitcoin through OTC markets, trying not to expose large transactions on open exchanges.

Why Crypto Whales Have So Much Impact On The Market

The reason is simple: their trades shift the balance of supply and demand. When crypto whales start actively buying or selling assets, they change the total volume of orders in the order books, which leads to price movement.

For example, if several crypto whales start selling tens of thousands of bitcoins in a short period of time, the BTC rate can collapse by 10-15% in one day. Similarly, if whales massively withdraw bitcoin from exchanges to cold wallets, this reduces the supply, which usually contributes to the price increase.

Crypto whale strategies

It is important to understand that crypto whales are not always “evil manipulators”. Their strategies vary:

• Long term HODL.
  Many whales buy Bitcoin and simply hold it for years, believing that the asset's value will rise.

• Algo trading and accumulation by levels.
  Crypto whales use complex trading algorithms to buy and sell so as not to move the price too much.

• Pump and dump.
  More aggressive strategies involve artificially inflating the price (pumping) to attract a crowd and sell at a higher price, after which the market falls sharply.

• Hidden deals on OTC markets.
  To avoid influencing the price, whales often buy and sell crypto outside of exchanges through OTC brokers.

How to Track Crypto Kitties

To understand what crypto whales are planning to do, analysts use several tools:

• Whale Alert.
  This service tracks and notifies about large cryptocurrency transfers on blockchains.

• Glassnode and LookIntoBitcoin.
  They show the dynamics of balances on large wallets, which allows you to see whether whales are withdrawing BTC to exchanges or, on the contrary, moving it into cold storage.

• Analysis of stablecoin flows.
  When USDT is pouring into exchanges, it often signals a willingness to buy crypto. And the withdrawal of stablecoins can indicate profit-taking.

How Crypto Whales' Behaviour Affects Retail Investors

For retail traders, crypto whales are both a threat and a landmark.

• When crypto whales start selling, the market drops sharply, knocking out the stops of small traders.

• When they buy Bitcoin en masse, it creates strong upward pressure, drawing new participants into the market and forming bull runs.

That's why it's always important to look not only at the chart, but also at on-chain analytics data. This helps to see in advance when crypto whales are withdrawing BTC from exchanges (a signal for long-term growth) or, on the contrary, bringing it there for sale.

What should an investor do to avoid becoming a victim of whale movements

Here are some practical recommendations:

• Regularly monitor reports on large transfers.
  Subscribe to Whale Alert and analyse Glassnode data to spot large crypto movements.

• Use stop orders.
  This way, you won't lose your entire deposit in case of a sharp movement caused by crypto whales.

• Diversify your assets.
  Don't invest everything in one coin, even if whales are actively buying it. If necessary, you can always quickly and safely exchange crypto for another to reduce risks.

• Study order books.
  Sometimes large orders from crypto whales can be seen in the order book - this helps to understand where large purchases or sales may work and where to place your limit orders.

Cryptokitels are an integral part of the cryptocurrency ecosystem. They provide liquidity to the market and at the same time create risks for small traders. It is their purchases and sales that often cause large price movements. But if you properly monitor the behavior of crypto kits, you can not only avoid losses, but even "swim with them", opening deals in the same direction and making a good profit.

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