How do Crypto Whales affect the price and why should traders monitor them?

Hello fellow traders!

Cryptocurrencies are increasingly entering our lives. In today’s article, we will touch upon a very interesting topic related to large holders of relevant assets (primarily bitcoins). They are called “Crypto Whales”.

We will figure out who they are, how to track their actions, and also try to benefit from this information. As usual.

It’s hard not to notice a new trend in the Forex market – cryptocurrencies are in the list of instruments at brokers.

Internationally, there are no more than 20% of Forex companies trading in cryptocurrencies, but in a year we will see a kind of “Cambrian explosion”. It consists in a sharp increase:

  • The number of brokers supporting digital currencies;
  • The number of types of cryptocurrencies in the offered instruments;
  • The number of types of derivatives and, most importantly, the emergence of CFDs on various crypto indices.

The largest investment banks in the world have decided to publicly support the trading of digital assets, which will appear from liquidity providers and will automatically become available to clients of foreign exchange brokers.

Many of us, for various reasons, have a negative attitude towards these tools. They are technically difficult to understand, their growth is similar to a hype, and volatility significantly complicates the use of indicators for intraday trading. There is no need to talk about fundamental analysis at all – today there are no separate economic indicators for Bitcoin and altcoins.

Despite the above disadvantages, there is one important feature that is present in almost every cryptocurrency. It greatly simplifies analysis, forecasting the movement of a digital asset and trading. A distinctive feature of cryptocurrency is the availability and transparency of all actions and transactions of large investors, which in traditional markets is considered insider information.

Crypto Whales, Stakers and Holders – the Basis of the Cryptocurrency Market Ecosystem

Digital currencies, like Forex national currencies, called “fiat” in the slang of crypto traders, are only part of a complex ecosystem.

Unlike Forex, cryptocurrencies do not have central banks, their monetary policy is determined by the blockchain algorithm or the digital democracy community (DAO), where each coin owner has a vote under certain conditions. This is called the ecosystem of the digital currency, which includes, among other things: the method of mining, the type of consensus, etc.

Unlike fiat, the rate of which depends on the words and actions of representatives of the Fed, the ECB and other world financial regulators, inflation, the size of the issue and even the distribution of coins in hand is known in advance to every Internet user.

The code of any cryptocurrency is openly posted on the developers’ website or on GitHub – the largest web service for programmers, where the final emission and the speed of issuing blocks with new coins are prescribed, which allow calculating inflation.

The same information in a simple and accessible form, along with price statistics, can be found on the CoinMarketCap website. By clicking on the name of the cryptocurrency of interest, in the opened card you can see (for example, Bitcoin):

  1. The total size of the issue and the number of coins issued;
  2. Official website address;
  3. Blockchain Explorer.

The latter tool helps to determine not only the speed of block assembly, but also shows the transaction history of each coin, the size of the deposit of each wallet and the movement of the digital currency in general.

The basic principle of the cryptocurrency blockchain is complete publicity and transparency, which opens up the opportunity for anyone to calculate the actions of crypto-whales and holders.

Crypto Whales – holders of cryptocurrencies with large volumes of coins on their wallets.

Holder is a more general term that applies to all traders who use a buy and hold strategy.

Unlike Bitcoin, a number of cryptocurrencies have “reluctant holders”. They are forced to “freeze” funds for a certain period as collateral (Stake). This guarantees their “honesty” when confirming transactions due to the threat of loss of funds in case of manipulation.

Thus, stakers are a certain type of miners who receive a reward for assembling blocks with cryptocurrency transfers in exchange for a share of the cryptocurrency placed as collateral.

If Forex market traders are forced to analyze the order book or wait for Friday’s COT reports, then in most digital currencies it is not difficult to track the actions of large account holders and the movement of crypto capital. In this regard, the blockchain really serves as an open ledger of all transactions in real time.

How Do Crypto Whales and Stakers Affect the Cryptocurrency Market?

The rate of a single cryptocurrency, like a stock stock, depends on the amount of free float, assets in free circulation. Crypto Whales, as a rule, collect coins into the wallet for the purpose of long-term hold, justified by the history of the growth of the rate of digital currencies, which can be estimated by the dynamics of their total value.

According to the statistics available on the CoinMarketCap website, it can be seen that the market capitalization was $ 1.63 billion 8 years ago. Now the value of all assets is 1000 times more, it is accumulated by 45% in Bitcoin and by 25% in the first three large altcoins.

The thousandfold growth of cryptocurrencies made of crypt-whales convinced holders who, by their purchases of assets and their retention, create a free-float deficit on the market, pushing the course to new heights. And for the same reason, digital currencies with a blockchain, where “stake” are provided, are growing.

The desire to make money on the “freeze” of the cryptocurrency increases the rate due to its active purchases on the market. Staking often stimulates the emergence of crypto-whales, because it is the size of the share of the deposit according to the blockchain algorithm that guarantees a higher frequency of receiving rewards.

How to analyze cryptocurrency blockchain wallets?

An increase in the balance of crypto-whales wallets serves as a signal confirming the current growth of the cryptocurrency market, but does not give traders an advantage in the form of a leading indicator.

It is much more important to monitor the behavior of large holders at the time of the fall of the cryptocurrency market. If a depreciation leads to a decrease in the deposit by crypto-whales, put a stop-loss as close to the held position as possible or try to get out of it – selling crypto-whales can lead to a market collapse.

An active increase in deposits at the addresses of “whale” wallets at the time of the market decline indicates the proximity of the bottom. Of course, you should not count on an instant reversal when the described divergence appears. The trader must break his entry into parts and be ready to average the position.

Large wallets can be found in the statistical compilations of blockchain observers. These are special services that contain not only the history of all transactions, but also an additional set of their own research. For example, on the site bitinfocharts, large addresses are in the “Explorer” section.

Let’s choose the Bitcoin browser as an example of analysis. As you can see from the picture below, the service has already broken down analytics into lists to track the actions of crypto-whales. All major wallets are located in the Richest addresses (1) section. The observer gives out the top 15 addresses of whales, an expanded rating of the top 100 can be seen by clicking on the name of the list.

Below is a selection of the top 100 addresses (2), selected by the amount of transfers in 24 hours. It is these statistics that are used to quickly track the actions of crypto-whales. The “Login” column shows how many transactions (in 24 hours) were received by the wallet. The “Output” column shows the number of transfers from the wallet.

Accordingly, the amounts of inputs are the total amounts of all replenishments, and the amounts of outputs are the spending of deposits we are interested in. Let’s take a closer look at the current table.

Throw away immediately zero balances that are received and spent in one day (marked with a yellow marker). The cryptocurrency came and left immediately, which does not matter.

Do not pay attention to wallets with a high number of deposits and expenses per day, a trader should be interested in holders with a large deposit who received a large transaction and did not spend it anywhere in a day, or vice versa – made a large withdrawal without receiving funds from outside. Such accounts can be easily identified by the empty fields in the “Inputs” or “Outputs” column:

In the figure above, you can see that using such a system, three addresses were found in 24 hours. Two addresses replenished wallets for large amounts of 23 BTC and 10 BTC, one address withdrew 9 BTC. Obviously, on the day of the analysis, sales outweigh the BTC purchases.

The blockchain allows you to find out the time of the transaction by clicking on the link to the crypto-kit wallet address. The deposit we watched was replenished on January 30, 2021. The owner decided to get rid of the entire amount on May 25 at 00 hours 41 minutes.

Compare this to the trend on the BTC chart. The sell-off coincided with Bitcoin’s attempt to refresh yesterday’s high. It is worth listening to the crypto whale and also fixing some of the positions. The graph shows that he bought BTC at this year’s low, held the position despite a 40% decline, and now merged it on a bounce.

As you can see from the analysis example, large transactions should be dismantled promptly; the Whale-alert service will help the trader in this, publishing transactions in dozens of types of cryptocurrencies in his Twitter account. The company provides streaming information about transfers from $ 20 thousand, providing them with a mark of importance and decryption, if the Recipient / Sender of the wallet is known.

Deciphering wallet owners is important to exclude cryptocurrency exchanges from the analysis, which keep the deposits of all their clients-traders at the same addresses. Previously, their size correlated with the growth and fall of the cryptocurrency rate, but 2020 made unpredictable adjustments.

As the Bitcoin exchange rate and the cryptocurrency market as a whole grew, the balance of wallets of all major exchanges fell sharply. A similar case of divergence was recorded in 2016, which makes it possible for some analysts to assert about the signal of a mega-growth wave, but the fact remains that cryptocurrency exchange wallets are not suitable for the role of crypto-whales.

Analyzing the total number of whale accounts is another way to predict the bottom and depth of a market decline. Similar general statistics are available on the Glassnode website. Select the “Charts” option, the type of cryptocurrency and expand the “Addresses” menu:

The service offers 38 types of analysis of crypto accounts on the blockchain, but the most informative is the number of addresses with a balance above 10,000 BTC. Notice how in history the big players came out ahead of long-term tops, which the market spent years updating.

Striking on the chart is the panic sale of Bitcoin crypto-whales at the time of the 2018 crypto winter and a significant volume of purchases at the time of the market collapse in March during the 2020 coronavirus crisis.

The problem is that the service does not show statistics of the last year for free, but it would surprise the analyst. For the first time in the history of the cryptocurrency market, the owners of huge BTC accounts used the unprecedented rise of the market to actively sell their assets.

How to predict the future movement of the market based on signals from institutional crypto-whales?

In the cryptocurrency market, institutional clients are most informatively represented in the Tether system, which issues USDT tokens pegged to the US dollar, and the Grayscale investment fund trusts. Despite the relatively small share of investments – just over $ 100 billion – statistics show that movements of these capitals in the form of Tether emission often occur before major trends or reversals in the digital currency market.

Tether is notable for the fact that it works directly with large OTC services in China, buying 68% of the USDT token supply. It “leaves” in large batches of several hundred million for one tranche.

The moment of a large issue can be tracked in the Whale-alert service. Be careful: you are interested in the fact of the release of new coins, and not any transactions. Such messages are marked with a wad of money and the word “minted”:

The market begins to grow steadily literally the next day after the issue was printed. It is worth reacting to the issue of lots of $ 1 billion USDT per day. Anything below this threshold may not trigger growth in the cryptocurrency market. Sometimes, especially when the price of digital assets falls, the issue causes an increase for one or two days. A trader must protect his paper profit with a stop loss if Tether’s efforts are not enough to create a full-fledged trend.

Grayscale is the largest investment fund that has been issuing shares of trusts backed by real cryptocurrency for 7 years. The company licensed 14 crypto trusts in the United States, which are available only to professional investors who are ready to invest at least $ 25 thousand for six months or a year without the right to withdraw funds.

An alternative option for retail investors is to buy shares of these trusts in the OTC market, issued for the amount of cryptocurrency purchased with investments of institutional clients. Grayscale received three licenses from the US Securities Commission to issue shares of three trusts: Bitcoin, Ethereum and Litecoin.

The company conducts a completely transparent business, publishing daily reports on Twitter, skipping only the days when there is no inflow / outflow of funds in the funds of the funds.

You can track the actions of crypto-whales by the last column of daily changes. If they are above 5% for BTC and 10% for other cryptocurrencies, a trader should think about opening a long. As in the case of the Tether analysis, such a position needs to be further protected by a paper profit with a stop loss placed in the breakeven zone.

Features of the analysis of statistics of crypto-whales

Despite the obvious relationship between an increase in the deposit by crypto-whales and sales that directly affect the rate of cryptocurrencies as a whole or an individual asset, the analysis system does not look like a grail. The reason for the failure of some of the forecasts is in the high investment horizon of crypto-whales, the need to enter the market and sell capital in parts so as not to bring down quotes.

Analysis of wallets gives quite general trend directions, which are worth “repeating”, expecting to conduct several transactions, and not enter the entire deposit. The described signals from Tether and Grayscale funds are more accurate in this regard, as you can see for yourself – statistics on them are available on social networks and on charts compiled by enthusiasts.

They usually combine USDT and Bitcoin charts on the CoinMarketCap website. First, a Tether USD token card is selected, which can be accessed by clicking on the name of the cryptocurrency in the list on the title page.

The researcher is not interested in the rate, but in the capitalization (emission) of USDT. This data can be displayed on the chart by selecting the MarketCap option in the upper left above its field. There you should also decide on the standard history interval, for example, taking the last 7 days. The same timeframe must be selected on the Bitcoin chart card.

Next, we make screenshots and combine both graphs. Shown below is a weekly strong drop in BTC, which ended a day after the surge of over $ 1 billion USDT printed in one day to the market.

The graph of changes in the capitalization of the Grayscale fund and the associated behavior of the Bitcoin rate can be found at this link on the Chinese cryptocurrency exchange Bybt. Notice how the institutions abruptly stopped buying Bitcoin earlier this year and what happened to the exchange rate after freezing their investment increases for the longest period in history.

None of the above signals are suitable for short. The cryptocurrency has a feature of high inertia of an upward trend, and crypto-whales, like institutional investors, only close part of the positions, often making mistakes in determining the top of the market.

Cryptocurrency is a long-term hold tool that provides for constant additional investments and partial profit-taking at times of a predicted market downturn. Speculations from a short do not make sense, given the high risk of loss and the much greater prospects of working from a long.


The considered topic of researching cryptocurrency wallets shows significant differences in the analysis of a new class of currencies from the traditional approaches of Forex technical analysis. The transparency and openness of the blockchain allows the trader to obtain comprehensive information on any type of capital movement in the world of digital assets.

It should be noted that these data are much more effective than technical indicators, the signals of which are lagging or are partially false. Analysis of wallets is just one example of an approach to predicting cryptocurrency trends, which are influenced by the level of decentralization, the activity of code developers, technology features, etc.

Take care, Michael

Liked the article? Follow our Facebook page and be the first to know!

Want to try Forex trading? Choose a reliable Forex broker Roboforex and get a 30USD bonus to start trading.