Most cryptocurrency blockchains are publicly viewable. This means that anyone can see most cryptocurrency transactions happening in real time
On chain analytics platforms combine price with on chain data to create new indicators that often give you a much clearer view of the crypto market than technical analysis indicators and price patterns
The only problem is that most of these advanced on chain indicators cost thousands of dollars to use. Some of them even cost tens of thousands of dollars… per year!
The good news is that many of the free on chain metrics are just as good if you know how to use them correctly, and this includes whale movements
📊Whale Movements And The Crypto Market📊
When you see a cryptocurrency is being sent from a regular wallet to an exchange wallet on a blockchain explorer, this means the person who sent that cryptocurrency probably wants to sell it
Conversely, if you see that hundreds of millions of dollars of a cryptocurrency is being sent from an exchange and into a wallet, whoever’s behind that wallet is not planning on selling any time soon
If you’re wondering what those exchange-to-exchange whale movements are all about, the answer is arbitrage
In other words, a whale is taking advantage of a small difference in price between two exchanges, and because they have so much capital that small difference offers a sizeable return in dollar terms
When you’re seeing hundreds of millions of dollars of cryptocurrency going between regular wallets, it’s probably an OTC trade of some kind
📏What Counts As A Whale Movement?📏
The answer changes depending on which whale tracking tool you’re using. For example, Whale Alert seems to report every transaction on 13 blockchains that exceeds 1 million US dollars in its twitter feed
This arbitrary threshold can be a huge problem when it comes to measuring how much of an impact a whale movement could have on the price of a cryptocurrency. This is because of market depth
Market depth tells you how much money is required to push the price of a cryptocurrency up or down on any given cryptocurrency exchange
🕵️♂Beyond Basic Whale Movements🕵️♂
Because most altcoins are heavily correlated to Bitcoin, a Bitcoin whale movement could crush your favorite alt even though there was no significant whale activity taking place on that altcoins blockchain
Moreover, as we approach the peak of this bull market, certain whale transactions will become more important than others. Specifically, those belonging to old wallets or famous crypto investors
👨💻Whale Movement Trading Psychology👨💻
Smart money knows how the average retail trader is likely to react to certain whale movements. This makes them privy to manipulation by big investors who could push up the price by a couple of percentage points following a trivial whale movement to give the illusion that something is happening
