There are four primary ways to track whale activities, which include monitoring known whale addresses, order books, sudden changes in market capitalization and trades on crypto exchanges.
Whales are held responsible for sudden price fluctuations in the crypto and traditional markets every so often. Given their capability to manipulate market prices, it becomes paramount for the general Bitcoin (BTC) investors to understand the nuances that make one a whale and their overall impact on trading.
Wallet addresses that contain large amounts of BTC are identified as Bitcoin whales. Dumping or transferring large amounts of BTC from one wallet to another negatively impacts the prices, resulting in losses for the smaller traders. As a result, tracking Bitcoin whales in real-time allows small-time traders to make profitable trades amid a fluctuating market.
Despite Bitcoin's global and decentralized nature, tracking down and monitoring whales simply boils down to accessing readily available trading data from crypto exchanges and services. There are four primary ways to track whale activities, which include monitoring known whale addresses, order books, sudden changes in market capitalization and trades on crypto exchanges.
Monitoring known whales provide a headstart to smaller investors as the likeliness of coming across a whale trade increases significantly. Moreover, keeping track of market changes via order books and trades on crypto exchanges indicates incoming whale trades, which can be leveraged to profit during volatility.
The crypto community also uses free services that inform investors about successful whale trades, often including information about the sender’s and receiver’s wallets and the amount. One of the most popular services for automatically tracking whale trades is @whale_alert on Twitter, which issues alerts related to large transactions as shown above.
In a recent market update, Cointelegraph revealed that on-chain data suggested that the largest Bitcoin hodlers were reluctant to act at current prices. BlockTrends analyst Caue Oliveira supported the above finding by highlighting a "hibernation" continuing among whale wallet. He added:
"Institutional movements, or commonly called "whale activity" can be tracked based on the transaction volume moved over a short period of time, both denominated in BTC and USD."
Moreover, numerous altcoins continue to mimic Bitcoin’s bearish trends as whales await a greener sentiment across the crypto market.