If you were around during the bull run, you must have heard of the phrase “crypto whale.” We understand that there’s been a lot of newbies in the crypto community who might have little or no idea about the term.
So we wrote a two-part series to explain the concept of crypto whales and how they work. If you missed the first part, you can find it here. There, we talked about how whales affect crypto and also showed you some of the biggest whales in the market.
This time around, we’ll be looking at other things, including why Ethereum whales are buying Shiba Inu.
How Crypto Whales Work
Crypto whale is a term commonly used to refer to institutional investors or individuals possessing many crypto holdings. For example, a small number of investors hold a significant amount of Bitcoin. These wealthy guys are known as Bitcoin whales.
$BTC futures traders are now mostly whales.
— Ki Young Ju (@ki_young_ju) October 20, 2022
Whales are like the crypto elites. They have the funds to make huge purchases; sometimes, their buy-and-sell strategy controls the market. Whales have always determined the emotions of the market. But how exactly do they work?
So, whales affect the liquidity of an asset as well as its price. In terms of liquidity, fewer coins are available if a large concentration of cryptocurrency sits in a wallet rather than being used. So, the liquidity of that asset is reduced.
Whales can also increase price volatility when they move a large quantity of crypto in a single transaction. For instance, if a Bitcoin owner attempts to exchange their cryptocurrency for fiat, the lack of liquidity and huge transaction size put downward pressure on the price of Bitcoin because other market players will be able to follow the transaction. Notably, other investors are on heightened alert when whales sell, looking for signs that they are “dumping” their assets.
The average quantity of a certain cryptocurrency that is deposited into exchanges, or the exchange inflow means, is a common indicator that cryptocurrency investors keep an eye out for. If there are a lot of whales visiting the exchange and the mean quantity of coins per transaction goes above 2.0, whales are likely to start dumping.
Why Ethereum Whales are Buying Shiba Inu
Whales flex their economic muscles by buying a high quantity of a coin. One of the coins Ethereum whales appear keen on is the Shiba Inu memecoin. Shiba Inu continues to have the largest USD-valued position among Ethereum whales, with large wallets holding about $1.3 billion worth of SHIB, according to WhaleStats. This great domination can be explained by whales’ ambition to dominate the asset’s market circulation.
One reason for the bullish behavior of Ethereum whales is possibly the rising rate of SHIB token burning. Even though the quantity of coins in circulation hasn’t significantly decreased yet, a vigorous burning campaign may eventually increase the price of Shiba Inu.
🐳😲 An #Ethereum whale wallet that had not been active for 6+ years woke up today & moved $22.2M worth of $ETH to an empty wallet. $ETH's price is +8.1% since this transaction, briefly jumping over $1,500 for the 1st time since the #merge 6 weeks ago. https://t.co/bLwZZwhJSa pic.twitter.com/L78mAfJHq2
— Santiment (@santimentfeed) October 25, 2022
Furthermore, the launch of the Shibarium Layer 2 solution is perhaps the most significant reason. Ethereum whales believe Shiba Inu has the potential to find success in the future, like Dogecoin.
Where to Find Crypto Whales
Whales prefer to stay hidden, but you can track their activity through on-chain analysis. This implies tracking crypto whale trades by scrutinizing blockchain transactions. You observe the transaction values and block sizes. So, a high transaction value signifies that a significant sum of the asset has been exchanged. A large block size represents a large amount of data.
A whale just staked 22 BILLION $LUNC!
People are getting ready for new validators to come out!
— Classy 👾 (@ClassyCrypto_) October 26, 2022
You can monitor three main types of activities:
- Wallet-to-exchange transactions
- Wallet-to-wallet transactions
- Exchange-to-wallet transactions
Crypto Whale News
There are different platforms to find crypto whale news. There are paid communities that alert members of whale activities. Then, social media platforms like Telegram, Twitter, popular blogs, and analytic platforms are good places to get details about crypto whales.
Do you think crypto whales are good for the market? let us know in the comment below.
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