Posts

Meaning of being a crypto whale

avatar of @piensocrates
25
@piensocrates
·
·
0 views
·
4 min read

A crypto whale is a term that we commonly hear when we are immersed in the field of cryptocurrencies, but...

What is a crypto whale?

As we well know, in the normal world, whales are very large animals, in fact, they are the largest known mammal; They are very powerful marine animals.

In the crypto field, whale is a term used to describe large investors; those people or institutions that have enormous capital invested in cryptocurrencies. The enormous capital that the crypto whales possess gives them their enormous capacity to invest in the cryptographic markets and, therefore, to affect them.

Image Source

And why do they affect them?

Because as we well know, markets move based on supply and demand; that as a general rule it works in such a way that if there is more supply than demand in a market, prices fall; and if the opposite occurs (that is, if there is greater demand than supply) prices rise or tend to rise.

So, given the enormous capital that crypto whales possess by definition, they move enormous volumes of money and buy and sell enormous volumes of cryptocurrencies (or to put it another way, they buy and sell cryptocurrencies in industrial quantities). It is in this game where these whales move the markets as they please and make huge profits.

What should be done given this scenario?

Logically, most of us who operate and invest in the crypto markets are not whales (or anything like it), the only feasible thing, the smartest thing, and the best thing we can do if we want to make a profit with cryptocurrencies is to imitate the whale behaviors.

But... how to know exactly what the whales do, or what they will do? Well, it is not easy to know, so the best we can do in most cases is to guide ourselves in the markets based on technical analysis.

But...

What is technical analysis?

As we well know in trading and investments there is technical analysis and fundamental analysis. Fundamental analysis consists of news, various information that reveal about measures (government or not) that affect the markets in one way or another due to the way people and institutions view and interact with them.

Technical analysis, on the other hand, can be understood with that set of statistical-mathematical tools that, applied to information graphics, give us an idea of ​​what the market price of an asset will most likely do next.

In technical analysis we have, for example, the use of indicators such as moving averages (simple and exponential), MACD, volume, RSI, Stochastic and many others.

So, thanks to technical indicators we can see or appreciate how the most important factors in the market (of any market) are acting, and this is especially useful in the case of cryptocurrencies, due to their highly volatile nature.

Something that we must take into account is that there are various online platforms (both free and paid), which will allow us to carry out the technical analysis of almost any cryptocurrency that we need (as long as they are in their listings). An example of the mentioned platforms are Investing.com and Tradingview.

Suppose we want to do a technical analysis of the Bitcoin chart on Investing.com based on a pair of exponential moving averages (one with 15 periods and the other with 35 periods), since we only have to search for the Bitcoin chart and display the respective averages and configure them. according to the mentioned number of periods and the color that we want for each exponential moving average.

With this we will be able to carry out a basic analysis or have a slight idea of ​​what is happening in the market and what is most likely to happen with the price of the asset based on the mutual behavior of both exponential moving averages.

What has just been mentioned is a simple example, it does not mean that anticipating the price is as easy as displaying and using two exponential moving averages regardless of their configuration; but in general, using exponential moving averages in conjunction with other tools and indicators in an ideal way, will allow us to carry out an analysis with a greater probability of success of what is happening in the market; and what may or may not happen in the future with the market asset price (depending on the timing we are analyzing and the type of trader or investor we are).

Emphasizing then, specializing in technical analysis is one of the things that will allow us to anticipate in a more reasonable way (with a higher percentage of success) what the market price of any crypto asset will probably do; although we must always bear in mind that the price of Any asset in the market cannot be predicted with 100% accuracy, no matter what factor or tool we use to analyze it.

Additional Information

Everything I have said up to this part of the post is important, but in addition, there is a tool that we must take into account to know the movement or behavior of the crypto whales at a given moment; and it is to follow the movements and volumes of what they do. And how can we do this? Well, this is possible thanks to a Twitter account called https://twitter.com/whale_alert.

This is an extra bit of insight that will allow us to understand what the whales are doing and anticipate what move the market is most likely to make next as a result of it.

Because the biggest meaning of being a whale is that you don't have to worry about what the market will do, because the market will move based on what you and other whales do; but are the small and medium investors (like us) who must worry about what the market will do, and for this, nothing better than conscientiously guiding ourselves through technical and fundamental analysis and, above all, paying close attention to what the crypto whales do. .

I hope my post has been useful to you. What do you think about the topic discussed? Please Comment!

Posted Using LeoFinance Beta