What is Bitcoin whale watching and how to track Bitcoin whales?
Bitcoin Whales are held accountable for sudden price fluctuations in the Cryptocurrency and traditional stock markets every so often. Given their capability to manipulate prices, it becomes of utmost important for the retail Bitcoin (BTC) investors to understand the distinctions that make one a whale and their overall impact on trading.
Wallet addresses which contain large amounts of BTC are called as Bitcoin Whales. Dumping or transferring large amounts of BTC from one wallet to another impacts the prices negatively, resulting in losses for the smaller traders. As a result, tracking Bitcoin whales in real-time might allow small-time traders to make profitable trades amid a fluctuating bear market.
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Despite Bitcoin is global and decentralized finance nature, tracking down and monitoring BTC whales simply boils down to accessing and understanding readily available trading data from Cryptocurrency Exchanges and Services. There are four major ways to track whale activities, which include monitoring known whales’ addresses, order books, sudden changes in market capitalization and trades on Cryptocurrency Exchanges.
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Monitoring known whales’ addresses provide a head start to smaller investors as the probability of coming across a whale trade increases significantly. Moreover, keeping track of market movements via order books and trades on Cryptocurrency Exchanges indicates incoming whale trades, which can be leveraged to profit during volatility and bear markets.
The cryptocurrency community also uses free services to inform retail investors about successful whale trades, often including information about the sender’s and receiver’s wallets, addresses and the amount. One of the most popular services for automatically tracking whale trades is @whale_alert on Twitter, which issues alerts on to large transactions done by the whales.
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In a recent market update, Cointelegraph also revealed that on-chain data suggests that the largest Bitcoin holders were unwilling to act at current prices. BlockTrends analyst Caue Oliveira also supported the above finding by highlighting an ongoing “hibernation” among whale wallets.
He added:"Institutional investors movements, or commonly called ‘whale activity’ can be tracked based on the transaction volume moved over a short period of time, both BTC and USD denominated.”
Moreover, numerous altcoins still continue to mimic Bitcoin’s bearish movement as whales await a positive sentiment across the Cryptocurrency Market.
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