Crypto whale are giant investors that affect the markets with huge fluctuations. Whales, who own large amounts of cryptocurrencies, can move the market up or down. They influence crypto markets by adding or removing liquidity, changing market sentiment, and creating fluctuations.
Whales create their own currents in the ocean, creating tracks and waves on the water; their presence is immediately recognisable. The same is true for crypto whales, which have enough assets to move the markets. However, not all whales are the same size, and the size of the trading market can affect the definition of a crypto whale. That’s why it’s so important to understand what a crypto whale is and the impact of the big players in the market before investing, whether it’s meme coins traded on a Tier 2 chain or a large global market like Bitcoin, crypto whales make a big impact when they arrive. So, what is a crypto whale, how is it defined? What impact do they have on trading? Now, dive into the world of crypto whales and discover the mysterious giants of the markets!
The term crypto whale refers to a person – or more accurately, a crypto wallet address – that holds a large amount of cryptocurrency. Usually, we define crypto whales in the context of market conditions. That is, the amount of a specific crypto they hold is such that it can affect the market prices of that coin or token. By trading large amounts, whales can cause fluctuations in the markets. This situation causes other investors to either join the wave and buy. Or they may sell due to whales lowering prices with large sell orders. However, even without trading, whales can influence the market. Many traders monitor the wallet movements of whales and track where they move their funds. For example, a crypto whale sending crypto to an exchange may indicate that this person is preparing to sell some or all of it. Whales can use such movements or orders on the exchange to influence the price.
How Much Crypto Do You Need to Become a Crypto Whale?
According to one definition, a Bitcoin whale is someone who owns 100 Bitcoins. However, the term crypto whale can vary depending on the market. For example, a whale may be considered a whale in the eyes of small investors due to the multiple assets it holds.Glassnode, a leading crypto data aggregator, categorises asset levels. Similarly, decentralised exchange platforms (such as Dexscreener) categorise wallet addresses based on trading volumes.
How Do Crypto Whales Affect the Market?
Now that we’ve answered the question of what a crypto whale is, let’s take a look at how whales affect crypto markets. Crypto whales affect the market in several ways. These include adding or removing liquidity, changing market sentiment, and creating fluctuations. According to a Bloomberg report, 2% of Bitcoin wallet addresses control 95% of Bitcoin supply. With Bitcoin and Ethereum ETFs gaining strength, crypto’s intense ownership dynamics will change. However, crypto whales will remain a part of the crypto world for the foreseeable future. Let’s look at how these crypto-rich giants affect trading.
The impact of whales is more dramatic in crypto markets than in traditional financial markets. This is because crypto markets are generally smaller. However, crypto whales can move markets up or down with their mere presence. Large buys and sells can drive charts up or down as they please. On exchanges, whales can create large sell walls or buy walls, suppressing or raising prices. Now that we understand what a crypto whale is, we can better understand market dynamics and the influence of large traders. As an investor, it is important not to let the actions of whales influence your investment decisions. In particular, avoid panic buying or panic selling. Instead, use dollar-cost averaging (DCA) and diversification strategies to reduce the impact of whales.