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How do whales affect the prices of Bitcoin

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“Whales” are a term usually associated with marine mammals but of late these mammals have been making splashes in the volatile crypto market. Let’s deep dive into the article to get detailed insights.

Who is a “whale” in the crypto market

There are several kinds of whales in the market.

  • Various cryptocurrency exchanges have a massive amount of Bitcoin in possession in their order books as a result they are some of the massive whales in the market
  • Various institutions and countries have hoarded massive BTC as a part of crypto adoption drives and as a result, they have hoarded a massive amount of BTC in their institutional wallets.
  • Certain individuals have garnered the whale status because they had bought Bitcoin when its prices were exceptionally low as compared to today’s prices

Do “whales” manipulate the markets?

A “sell wall” is a tactic a whale wallet sets up a sell order to sell off their Bitcoin at a cheaper price than the market price. This generates excessive pressure in the markets due to which the market has to drop down to the price at which the whale account had issued the sell order.

This tactic results in a massive panic selling wherein people start selling their Bitcoin at cheap only because of the whale wallets that can capitalize on this low price as per their wish.

The moment the whale account withdraws its sale orders the market starts stabilizing.

However, if we look at the data we will immediately realize that most of the whale wallets in the market are big-time HOLDers. They have seen various cycles of the cryptocurrency markets and as a result, they have a reinforced trust in the profitability of Bitcoin, they patiently wait for the next cycle and are completely assured of its profitability.

Statistical data analysis points to the fact that on a 30-day moving average we have seen whales being profitable nearly 70% of the time.

Disclaimer: The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Please do your own research.


Author - Govind R.