If you look at the markets, you know that there are different actors, and among them we have crypto whales. The reason that great actors are called in the world of cryptocurrencies, with a high level of influence on it, is not in vain.
For example, whales are smart hunters. Some feed on small fish and even seals, and for this they use quite intelligent strategies. Now, imagine what happens with the whales in the crypto world …
So you can be aware of what are these strategies that crypto whales use, especially if you are starting in this world, here in CriptoTendencia we bring you a summary of them.
This information can be useful above all if you want to understand the relationship between the actions of crypto whales and the fluctuations in the price of cryptocurrencies in the market.
Pump and Dump: Strategy # 1 of crypto whales
One of the most common tactics is pump and dump. Whales have enough funds to artificially pump (pump) the price of a certain currency. Because there are no restrictions on cryptocurrency exchanges, this happens a lot.
The tactic is simple. A whale or a group of crypto whales will start making big purchases. This will result in a large price increase and huge green candles in the observed graphics. Sometimes purchases extend over a period of days. Something that results in a gift is that the price increase caused is generally immense.
With this price increase, new investors are attracted. The cause behind it is the “Fear of Missing Out,” or fear of losing the chance. Demand naturally grows, and with it the price of the cryptocurrency in question continues to rise. All this because of the action of crypto whales.
When the margin of a Pump is large enough, the whales start selling. This occurs in waves. A wave will maximize profit as a new investor will think it is only a temporary fall. In the end, the whales leave with a kill and the people who entered a moment of “permanent rise”, caused by the whales, are left with a considerable loss, at least until the currency increases its price again.
In order to better monitor this strategy you should follow the reports of Whale alert, the sail charts of the price of the cryptocurrency that interests you at the moment. In addition, if you find it convenient, you can read our weekly reports of their activity. An example is this.
This is the first step to understand crypto whales. However, there is still some pending knowledge that we will discuss in future articles. Stay tuned!
Degree in Liberal Studies from the Metropolitan University. Lover of innovation and believer of technology for the future.