Crypto market is still new and evolving, which makes it a volatile market that haven't found a solid foundation yet. This volatility is due to its low volume, specially in the alt-coin market. We all want to get our hands in the honey pot but foreseeing coin movement is a hard thing. In this article I will be explaining how to spot a whale buying and how to jump on the bandwagon.
When I first joined the crypto market, I was eager to make some profit by swing trading. I was uneducated with no experience in trading, I started watching tutorials on youtube, reading articles, guides and books on chart patterns.(If you are interested in educating yourself on chart patterns here is a great book to read: Encyclopedia of Chart Patterns by, Thomas N. Bulkowski) Foreseeing coin movement with chart patterns is really hard and you need to invest a lot of your time learning. When it comes to chart patterns even the best has around 50% correct guess ratio and you can never be certain on whats going to happen next.
Small money from planktons can keep the market alive but the real movement comes from whales. The word around states that 40% of total BTC supply is held by 1000 people, can you imagine the influence of that supply and how it can be used to manipulate the market? Don't think controlling that kind of supply is easy tho, making bulk coin purchases is a tricky business. When whales make coin purchases in this volatile market the prices can move quickly since their transactions can't be completed on a single value.
So how would a plankton survive in the whales market without being eaten; even benefiting both the whale and himself while reaching for the honey pot? There is a method that works like a charm, for noticing a whale purchase before the price starts to fluctuate.
Since a bulk purchase can't be completed on a single value you should be checking the back pages of the order book for sell orders. Heres three pages of sell orders for Sia Coin.
For Sia Coin's price to fluctuate from 0.00000262 to 0.00000289 a total purchase worth 86 BTC must be made. This hypothetical movement equals to a 9.6% price increase. This means that the whale has to clear a long range of prices to complete its investment. With a huge supply of money the investor can place a large sell and buy order to stabilize the price at its current position, while clearing the back pages of sell orders. When the clearing process is done the barriers that are set can be removed for the BOOM. When the price moves quickly, FOMO starts to kick in and more buy orders pile up, resulting in even a greater pump, which is why chipping in benefits both yourself and the whale. Manually noticing this kind of movement is really hard and requires hours of watching the back pages and not all coins has easy decimals like Sia Coin.
Here you can see three pages of sell orders for WAVES Coin. Unlike Sia Coin three pages of sell order accounts to less than 1% price fluctuation. Manually collecting data with coins like WAVES is near impossible considering you need to observe the books for hours.
This is where bots come in handy, in data extraction. The popular opinion is that, bots are used to do trading for you. This might be occasionally profitable, but I wouldn't recommend using them. There are great bots that can be programmed to extract information. Using them would be much more efficient than using a pre-programmed bot calling your buy and sell orders. Using bots to extract data is the best way for a trader to make profits. If you do your research, you can find great softwares where you can do the pre-programming and add if situations to your liking. This way you can be creative about calls, instead of trusting a generalized algorithm. If you are interested in bots, you can take a look on Haasbot, it is one of the advanced ones available on the market.
Now that you know one of many data extraction methods, you can continue trading with confidence. Just remember when trading, FUD and FOMO are your worst enemy. If you use logic and data you can get your share in the booming market. Good luck and happy trading!