What is a cryptocurrency whale?

Crypto whales refer to significant cryptocurrency holdings. They may be people or organizations that own more than 10 percent of a cryptocurrency. Numerous vital holders of the majority of cryptocurrencies can affect the asset’s price, making it advantageous for active investors and crypto traders to comprehend the market actions of these whales. MicroStrategy, for example, holds roughly 130,000 bitcoins (BTC) and may influence the price of bitcoin via their market activity. Consequently, monitoring the behavior of crypto whales offers immediate insight into the price movement of a crypto asset.

This is not only a cryptographic phenomenon. In traditional markets, the price of an asset goes up or down when a big player like Warren Buffett, a brand, or a hedge fund says it has a stake in that asset. Consequently, the market usually follows suit when big people sell an investment. All transactions involving cryptocurrencies and nonfungible tokens (NFTs) occur on-chain. Because a blockchain is public, the size of a whale’s crypto holdings can be used to find transactions made by wallets owned by whales. These wallets may be monitored to see how the market may behave.

What does crypto whale tracking entail?

There are tools specifically designed to track the activities of crypto whales. Sometimes, these tools may help the user invest or trade and provide information on whale behavior. Investors and sellers of cryptocurrencies always keep an eye on how many coins are coming into and going out of exchanges. When a significant amount of a cryptocurrency, such as Bitcoin or Ether (ETH), is transferred into a business, the price will likely decline due to selling activity. If, on the other hand, cryptocurrencies go from sales to wallets, this is a forerunner to a price increase.

This is because when exchanges see a large net outflow of cryptocurrencies, their supply goes down, which causes the price to go up. A whale might often purchase cryptocurrencies from a business and transfer them into their wallets in significant quantities. This might lead to positive price activity in the cryptocurrency market. In some circumstances, whales may opt not to purchase or sell in exchange for not upsetting the market. They would conduct an over-the-counter (OTC) transaction between two wallets. For example, they could send Bitcoin to a wallet that sends back USD Coin (USDC), allowing them to sell Bitcoin without the market noticing.

Also read: NFT Artist Shares His Journey Into the Industry.

When a significant transaction is recorded on the blockchain, investors can look at it and get the involved wallets. If the wallets house substantial bitcoin, they might be called “crypto whale wallets.” Regularly checking these wallets and their transactions may help determine the cryptocurrency’s price changes. Whale tracking may also be advantageous in the NFT markets. The majority of NFT communities have significant collectors. The community often recognizes these NFT holders. Tracking what these whales do with their wallets could help investors decide quickly whether to buy or sell.

For instance, if a well-known NFT collector or “whale” cleans the floor of a collection of nonfungible tokens, this may signify strong beliefs. Followers of the NFT collection and the whale would know this and buy the tickets that can’t be used for anything else. This tendency was seen several times with Gary Vaynerchuk throughout the 2021 NFT bull market. However, it may be difficult and time-consuming to monitor whale activity actively, even for a single cryptocurrency or NFT portfolio. This is when whale-tracking instruments become helpful.

What are the functions of crypto whale tracking tools?

The blockchain’s openness enables investors to identify wallets owned by whales and watch their purchase and sale activity thanks to whale tracking tools. Utilizing tracking tools aids in automating the tracking procedure. The majority of crypto investors own several cryptocurrencies in their portfolios. To keep up with changes in the market, they must find and keep an eye on many wallets that hold large amounts of the cryptocurrencies of interest. On-chain analytics tools provide this feature.

When a whale wallet makes a transaction, tools scan the blockchain and let the user know immediately. These technologies may also help detect transactions that exceed a certain threshold, enabling users to uncover the whales within a specific cryptocurrency ecosystem.

When the #crypto whale shark closed his mouth, the little shrimp couldn’t feel it inside.
It’s useless if you consult the little shrimps around you.
You must have a far enough vision to avoid risks in advance. pic.twitter.com/5d52FApeJ1

— CryptoCell Labs (@CryptoCellLabs) November 15, 2022

The “floor price” of a group of nonfungible tokens is the least amount that can be paid for an NFT. The floor price decreases when market demand for a particular NFT collection weakens. In the same way, NFT collections can be watched for things like listing new nonfungible tokens below the floor price, selling NFTs at the bid price, and floor sweeps, among other things. In the same way, NFT collections can be watched for things like listing new nonfungible tokens below the floor price, selling NFTs at the bid price, and floor sweeps, among other things.

Usually, the floor price drops when one NFT holder starts to sell the instrument for less than the floor price. So, monitoring techniques can be used to find these actions, so investors can be aware and take the proper steps. In contrast, sweeping the floor suggests a significant need for NFT collection. This refers to purchasing several nonfungible tokens in a group at the floor price. When a whale’s wallet brushes the floors of a new group, whale tracking devices may pick it up. This will let NFT investors know, and they can start to keep an eye on the new collection.

What are the most prevalent tools for monitoring crypto whales?

Whale Watchers, Whale Bot Alerts, and other apps that track whale activity can help investors spot whale activity and make quick decisions. Some whale monitoring solutions might be as important as a window on top of a blockchain, but others can do analytics and graph across multiple blockchains. Others provide NFT whale monitoring in addition to crypto whale tracking.

Some analytics programs only give the most critical information and alert about whale behavior, while others give users more in-depth ways to learn about charts and analytics. Whale Watchers, Whale Bot Alerts, Whale Map, Whale Alerts, Clank App, and Coincarp are some of the most useful apps for whale-watching. Others use platforms like Twitter and Telegram to keep people informed. Also, applications like Etherscan and Solscan sit on top of their blockchains and can be used to track whales.

One may become as technically proficient as feasible in whale tracking. However, the market’s response to a whale transaction is unpredictable. The knowledge of whale behavior is helpful, but it is just one-factor affecting cryptocurrency’s price movement. This is particularly true in a market heavily influenced by macroeconomic forces.