You may have the heard the term whale being tossed around the cryptosphere and have asked your self what the hell is a whale?? If you do not know yet whales are investors that have a big impact. The term ‘whale’ refers to an individual or a group of people that can manipulate the market using their massive crypto wealth. Whales are the big players, where the ocean is a metaphor for the cryptocurrency ecosystem. When you see an extreme and sudden jump on the chart of your coin, it is for sure that there are one or more whales together influencing the value.
With their large capital mass, institutions can move the market at will. The large players being referred to are institutions such as Hedge Funds and Bitcoin Investment Funds or individuals like John McAfee and the Winklevoss twins. Please note that while there is no sense in speaking of collusion, it seems only rational that large players should (at least, sometimes) coordinate their actions. Given that there are community members who are known to hold sizable amounts of Bitcoin, one could imagine that they would reasonably discuss and align their interests with other potential market movers.
Here is a wallet that I have personally been watching since Bitcoin hit a low of 5'8K in February.
A mystery investor who purchase 96,000 Bitcoin at its lowest. The effect of this purchase has most likely influenced the price thereafter.
How to Detect when a Whale is Buying?
1: Check the order book for an unusual surge in bid size
2: Change in volatility and price when the market is stagnant
3: Look for spur in buying volume against selling volume
How to Detect when a Whale is selling?
1: Track instantaneous cancellations of enormous buy orders
2: Check for strong surge in price in a short time period
3: Strong momentum in volume