- Tracking of crypto whales can reap huge dividends for investors as they exert huge price movements on digital currencies
Imagine swimming alongside a whale in the middle of an ocean, an experience that can be reassuring or frightening, depending on your proficiency at swimming and your comfort with the largest mammal on earth.
Now apply the same concept to the crypto world and you get the picture of what it could mean to follow in the wake of a crypto ‘whale’.
Used to describe investors who have a disproportionately large holding in a particular cryptocurrency as compared to retail investors, ‘crypto whales’ can influence the price of respective crypto tokens with their buying/selling power and disrupt crypto markets with relative ease.
It is therefore important to spot such whales and track their trading activity, to profit from it or to simply avoid being on the losing side of a trade.
Tracking wallet addresses and crypto holdings of crypto whales
Over the past years and through many bull and bear cycles, cryptocurrencies with large market capitalizations like Bitcoin (BTC) have usually reacted in direction of major trends when crypto whales have been in action.
While some meme crypto tokens like Dogecoin (DOGE) or SuperDoge (SUPDOG) can fluctuate wildly when crypto whales are in action, these large investors exert a considerable influence on the price by means of their trading volumes.
This makes it important for retail crypto investors to track the largest wallets and stay abreast of major changes in their holdings so as to align their trading strategy accordingly.
Thankfully, there are dedicated crypto websites such as Watcher.Guru that offer crypto whale tracking services along with a host of other analytics to guide the average crypto investor.
Providing unparalleled coverage of automated cryptocurrency whale tracking, this site also allows community users to vote for their favorite tokens and provides helpful insights into the most active cryptocurrencies.
In the same way, leading on-chain analytics platform Whalemap offers intuitive trading charts for the crypto community to understand crypto whale trading activity in one go.
Monitoring these top crypto whales in terms of the size of their holdings and understanding their behavior can help crypto investors to gain an edge in the most volatile crypto markets.
Monitoring trading activity with whale dashboards
While tracking large crypto wallets, investors have a higher probability of spotting large trades early, helping them take quick investing decisions to profit from the movement.
For example, if a Bitcoin whale executes a large buy order near a critical price support level, it is a cue for retail investors to follow suit and invest for a probable bounce towards higher price levels.
This necessitates tracking the live trading activity and involves a lot of tedious processes if done manually by checking order book changes.
One can access any major exchange like Coinbase and Binance to build a watchlist and constantly watch for signs of large trades.
Alternatively, crypto fans and investors can access free services from firms like Whale Alert which provide dynamic alerts and tracking services for a plethora of cryptocurrencies. Available on Twitter as @whale_alert, followers can expect prompt updates every time a crypto whale makes a splash in the crypto markets.
With more than a million followers across social media platforms, Whale Alert uses bots to post real-time transaction updates for traders, developers, and blockchain enthusiasts to benefit from.
However, for discerning investors who want to access a live trade feed and enjoy the freedom to filter data dynamically, the CoinLobster Whale watching dashboard is a much better alternative.
With users being able to check for transaction volumes above a customizable threshold limit, CoinLobster offers a combined order book visualization by compiling data across exchanges and can overwhelm novice investors with the range of tools on offer.
Tracking whale transaction volumes to understand underlying sentiment
While blockchain technology holds answers to a decentralized and more equitable future, cryptocurrencies are subject to market volatility and trends just as is the case with most traditional asset classes like equities.
Take for example the current bear phase, where most cryptocurrencies have significantly corrected from their peaks, on-chain data analysis indicates that BTC whales are still reluctant to lap up the most popular cryptocurrency at present prices.
This indicates a cautious approach and should be read correctly so that investors do not rush in to take fresh positions or average their holdings. On the other hand, in case crypto whale buying volumes trend higher with increasing token prices, it can be taken as a sign of a bullish reversal and should be acted upon for short-term gains.
Thus, tracking transaction volumes can be beneficial for crypto investors, not only to understand the hottest tokens being traded but also to take prompt investing decisions in case of trend reversals.
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