Sometimes when the price of BTC goes down or up, respondent traders bitcoin whale are 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 manipulate market prices with huge buy and sell transactions. Even though the market power of whales has diminished as more people introduce Bitcoin and the value of the cryptocurrency market has increased over the years, whales are still significant in this market. The crypto movements of the whales are always newsworthy.
Whales are generally dangerous because they are the biggest fish in the ocean and eat small sea creatures. Crypto whales are also known to eat petty 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 likely to sell these tokens, the price of LINK will certainly be strongly affected.
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In 2015, just a few years after the invention of Bitcoin, a huge BTC whale hit the market. As we have mentioned in the past, the whale effects were very high in low liquidity markets. The whale was probably hoping that selling 30,000 BTC at $300 each worked out 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, 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 go up or down can create a wall at a target price by entering a very heavy trade order on very high volume exchanges like Binance, FTX, OKX or Coinbase. For example, placing a buy order for 3,000 BTC at a price below the price at the price could create a support point for Bitcoin. If the whale is indeed bluffing, it will cancel the trade order when the BTC price approaches the level of the order.
How much crypto do whales hold?
Cryptocurrency whales often have huge amounts of crypto. 85 Bitcoin wallets currently hold around 15% of the BTC in circulation. 8 million BTC, which corresponds to almost 42% of the amount of BTC in circulation, is also found in the 2200 wallets with the most BTC. It’s $185 billion.
Whales like to buy and sell manipulative and volatile cryptocurrencies like Doge and Shiba Inu for short periods of time. While 27% of the total amount of Doge in circulation is held in a single wallet, the 15 wallets holding the most Doges hold 50% of the circulating supply.
Is Tesla a Bitcoin Whale?
Bitcoin was trading at $38,800 when You’re here announced on February 8, 2021 that it had purchased $1.5 billion worth of Bitcoin. After Tesla’s public announcement, Bitcoin price gained almost 50% in just 14 days and hit $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 instant price drop, the market subsequently returned to the same level. Tesla is a bitcoin whale, but speculative posts from Elon Musk using many alike tokens, especially Doge and Shiba Inu, have reduced Tesla’s influence on the crypto market.
Exchange vs Wallet Transaction
Bitcoin whales use cold wallets to store their funds 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 withdrawn 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 the 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 a different crypto.
Whale Alert is a well-known Twitter account for crypto followers. This account shared instantly large crypto transfers that happens in blockchains. If the sender or recipient is a known owner of the wallet, the account tags that in the tweet.
If you have on-chain analysis skills and know how to use blockchain explorers, you can follow crypto great whales and their transactions using explorers.
The crypto market does not yet have the controls and regulations attributed to traditional markets are subject. Although the market is less volatile than before, it is still volatile. Market manipulation is a common problem for whales. You will observe the whales and follow their transactions, but you should not trade solely on the basis of these transactions. You should always make your investing and trading decisions after doing enough research and using technical and fundamental analysis methods.
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Manipulation Power Of Cryptowhales
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