What are crypto whale trackers and how do they work?
There are dedicated solutions for tracking the actions of crypto whales. These solutions can provide analytics on whale stocks and in some cases can also make investment/trading decisions for the user.
Crypto traders and investors constantly track the amount of cryptocurrency entering and exiting exchanges. When a cryptocurrency like Bitcoin or Ether (ETH) is moved in large quantities on an exchange, one would expect to see selling action leading to lower prices. Conversely, if cryptocurrencies move out of exchanges into wallets, they are seen as a precursor to higher prices.
In effect, when exchanges have a high net outflow of cryptocurrencies, they have reduced the supply, which has led to an increase in prices. Often a whale can buy cryptocurrencies on an exchange and move them into their wallet in large volumes. This could result in bullish crypto price action.
In some scenarios, whales may choose not to disrupt the markets by buying or selling on an exchange. They would make an over-the-counter (OTC) transaction between two wallets. For example, they can send Bitcoins to a wallet which will return USD Coin (USDC), causing the BTC to sell without the market spotting the transaction.
When the blockchain records a large transaction, investors can study the transaction and retrieve the wallets involved. If the wallets hold large cryptocurrency positions, they can be labeled as crypto whale wallets. Therefore, regular monitoring of these wallets and the transactions made can be useful to assess the price movements of the crypto held in the wallet.
Whale tracking can also be beneficial in NFT markets. Most NFT communities have large collection holders. In many cases, these NFT holders are identified by the community. Tracking the behavior of these whales' portfolios can help investors make quick buy/sell decisions.
For example, if a famous NFT collector or a whale sweeps the floor of a collection of non-fungible tokens, it may indicate strong beliefs. Followers of the NFT collection and the whale would notice this and buy the non-fungible tokens. This behavior was noticed several times with Gary Vaynerchuk during the NFT bull market in 2021.
However, it can be overwhelming and time-consuming to manually stay on top of whale action, even when it's just a single cryptocurrency or NFT collection. This is where whale tracking tools come in.
There are dedicated solutions for tracking the actions of crypto whales. These solutions can provide analytics on whale stocks and in some cases can also make investment/trading decisions for the user.
Crypto traders and investors constantly track the amount of cryptocurrency entering and exiting exchanges. When a cryptocurrency like Bitcoin or Ether (ETH) is moved in large quantities on an exchange, one would expect to see selling action leading to lower prices. Conversely, if cryptocurrencies move out of exchanges into wallets, they are seen as a precursor to higher prices.
In effect, when exchanges have a high net outflow of cryptocurrencies, they have reduced the supply, which has led to an increase in prices. Often a whale can buy cryptocurrencies on an exchange and move them into their wallet in large volumes. This could result in bullish crypto price action.
In some scenarios, whales may choose not to disrupt the markets by buying or selling on an exchange. They would make an over-the-counter (OTC) transaction between two wallets. For example, they can send Bitcoins to a wallet which will return USD Coin (USDC), causing the BTC to sell without the market spotting the transaction.
When the blockchain records a large transaction, investors can study the transaction and retrieve the wallets involved. If the wallets hold large cryptocurrency positions, they can be labeled as crypto whale wallets. Therefore, regular monitoring of these wallets and the transactions made can be useful to assess the price movements of the crypto held in the wallet.
Whale tracking can also be beneficial in NFT markets. Most NFT communities have large collection holders. In many cases, these NFT holders are identified by the community. Tracking the behavior of these whales' portfolios can help investors make quick buy/sell decisions.
For example, if a famous NFT collector or a whale sweeps the floor of a collection of non-fungible tokens, it may indicate strong beliefs. Followers of the NFT collection and the whale would notice this and buy the non-fungible tokens. This behavior was noticed several times with Gary Vaynerchuk during the NFT bull market in 2021.
However, it can be overwhelming and time-consuming to manually stay on top of whale action, even when it's just a single cryptocurrency or NFT collection. This is where whale tracking tools come in.
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