If there's one thing that the cryptocurrency market has its fair share of, it's volatility. Crypto is the only market where you can get up from your desk to grab lunch and come back up or down 20%. It's definitely exciting and part of the draw, but for many people it can cause a lot of anxiety. Many have turned to technical analysis (TA) to try and predict where the market is going at any given time, and while TA certainly has its role to play, it isn't perfect.
I personally do TA on a daily basis and have built my Twitter following off of charting, but the one thing I always tell people is that TA should never be used as the be-all and end-all for your trading decisions. It should be treated as a guideline that can help tell a story for what could happen, not what should happen.
It is just one of the handful of tools that a good trader should use in order to make sound decisions in this market, including fundamental analysis (FA), market sentiment, and most importantly, sound risk management strategies. I have talked about the latter time and time again, because without it, you might as well be throwing darts blindfolded.
There is, however, one more very useful tool that I need to share with you all - something I recently discovered. Recall that I said volatility is the key characteristic that makes the cryptocurrency market unique, and it is this characteristic that can make or break your ability to succeed. It only makes sense that a tool which allows you to gauge volatility ahead of time would be the perfect complement to other important tools such as TA, FA, and risk management. In this case, that tool is a new platform called WhaleWatch.io.
WhaleWatch.io allows you to "get real-time, custom alerts of large volume crypto transactions to/from exchanges", according to their Twitter page. The platform has blown up on Twitter since its inception in September 2018, quickly rising to nearly 10,000 followers at the time of this writing. The platform allows you to set up custom alerts via their website on countless crypto tokens, giving you email alerts based on your settings when large wallet to wallet transactions occur on the tokens you are watching. Their Twitter account also tweets out certain transactions for those who prefer this method of communication.
So, how is this helpful, you ask? On the surface, there are many reasons why a wallet to wallet transaction can occur, and not all of them can be tied to volatility. And by no means will this tell you whether the price of a coin is going to go up and down. However, just knowing that volatility could present itself puts you one step ahead of everyone else, especially if you have sound TA to back it up.
Let me show you an example using Basic Attention Token (BAT). As you may know, BAT was recently listed on Coinbase, arguably the most well-known cryptocurrency trading platform in existence today. Coins that are added to Coinbase, or even rumored to be added, experience intense volatility, upwards of 40-50% at times. I put WhaleWatch.io to the test by tracking BAT after the Coinbase rumors began. Here's what I found:
In the above image, you can see a 1 hour chart of BAT on Binance, the world's largest cryptocurrency exchange by volume, and the exchange where I do most of my trading. The text bubbles show individual WhaleWatch.io alerts, the amounts, and the type of transaction. For example, "10:47 AM - $54,000 (U to B)" means that at 10:47 AM, $54,000 was transferred from an unkown wallet to Binance exchange. I was only tracking movement to Binance, in this case.
Notice how close these wallet transactions appeared in succession, and notice the extreme volatility that followed. Most interestingly this first example is only based around the rumors of the listing. Check out the next image, which shows wallet transactions from WhaleWatch.io right before the actual listing took place.
As you can see, what followed was a huge green candle, and if you had been playing BAT at the time and had WhaleWatch.io notifications on, you likely would have cashed in quite nicely.
In addition to this, you can see below a tweet from WhaleWatch's Twitter account, showing one of the transactions that occurred right before the listing happened.
The above images show that the wallet movement was definitely not a coincidence, and if used correctly, the WhaleWatch.io platform can really give you the edge you need to making the right moves at the right times.
I have been using WhaleWatch.io in conjunction with my TA strategies, and I have found it to be quite useful so far in being able to predict when a setup that I'm watching could actually follow through. The WhaleWatch.io platform is still fairly new, so I'll be continuing to put it through its paces, but I wanted to share this article in the hopes that it might help fellow traders in being able to hone in on future movements.
Trade safe, everyone!
You can follow me on Twitter here
Check out WhaleWatch.io's platform with the links below:
https://whalewatch.io/
https://twitter.com/whalewatchio
To sign up for Coinbase and get $10 in free Bitcoin with a $100 buy/sell, click here
To sign up for Binance, click here