Most times, when there's a drastic drop in bitcoin's price traders called " Bitcoin Whales" are known for disrupting themarket.
Bitcoin whales are individuals/groups who hold vast quantities of bitcoin and sometimes can sway the market towards their preferential price.
These market movers have been around the globe since early days. They shake out the weak ones off the market many times over the years but sometimes they also fail their mission as well.
Bitcoin Whales
If you trade in crypto currency (bitcoin and altcoin), you’ve probably heard the term “whale” before as the name is used to describe big cryptocurrency holders. The term is used because whales are the biggest species in the ocean and they can overpower smaller fish. Bitcoin whales are looked at similarly because they overpower the smaller bitcoin holders. Additionally, the smaller the market and less liquidity means whales can destroy smaller altcoin markets way more easily than bitcoin. We believe that Satoshi Nakamoto may be the biggest whale of all as the creator allegedly owns 1 million bitcoins.
Trade tactic; Rinse and repeat cycle
There are many trading stratagem whales use to make profit, like using a trading tactic commonly called the ’rinse and repeat cycle. The rinse trade is used effectively if timed correctly and its very profitable to bitcoin.
Utilizing buy and sell walls
Whales in a sense don’t even have to trade their bitcoins to affect the market as they can also bluff with buy and sell walls. In cryptocurrency markets, exchanges use an order book to facilitate trades where a buyer can set up an order to buy or sell at a specified price other than the spot price.
OTC Markets and Dark Pools
Sometimes whales don’t purchase or sell on traditional exchanges because their holdings or orders could cause a stir in the market. For cryptocurrencies over the counter trade (OTC) or “dark pools” is where big buyers and institutional traders can purchase vast amounts of bitcoins without being seen by the public eye. Dark pools are similar to OTC trading as they are usually found on exchanges that enable ‘off the record’ trades which ensures a whale’s moves are more private. Typically OTC markets and dark pools only allow traders who purchase an abundant amount of bitcoin at one time and set minimums for entry.
The Infamous Bear Whale
In October of 2014, there was an event where a massive whale bitcoin liquidated 30,000 bitcoins for $300 a piece. Many traders and speculators thought it would wreck the market at the time but instead, the order was ripped through by buyers and bitcoin’s price subsequently rose to $375. The event was remembered forever, and the trader will forever be known as the “bear whale.” The 30,000 BTC order was also recorded on video alongside many memes and graphics depicting the epic slaying of this gigantic whale. Many bitcoiners felt victorious that day in October because a whale of that size failed to sway the market.
Whales Are Often Blamed for Big Market Shake Outs
Whales have been discussed in the bitcoin space for quite some time, and they are usually blamed for unexplainable market phenomenon. Further, there are a lot of conversations across bitcoin forums asking the question — How many bitcoins does it take to be a whale? It seems the answer varies from 1,000 bitcoins to 10,000 bitcoins according to multiple threads on Bitcointalk.org and Reddit. Many people believe that whales can still affect the market due to bitcoin’s relatively small market capitalization where multi-million dollar orders can still shake things up. As bitcoin markets become stronger and gain more liquidity, speculators believe it now takes bigger bitcoin whales to shift the trading waters.
What do you think about bitcoin whales? Do you think large holders can still sway the market? Let hear your opinion, upvote and resteem