What is Bitcoin whale watching and how to track Bitcoin whales?

by · July 16, 2022

Whales are held responsible for sudden price fluctuations in crypto and traditional markets from time to time. Given their ability to manipulate market prices, it becomes important for general Bitcoin (BTC) investors to understand the nuances that make one a whale and their overall impact on trading.

Wallet addresses that contain large amounts of BTC are identified as Bitcoin whales. Dumping or transferring large amounts of BTC from one wallet to another has a negative effect on prices, resulting in losses for the smaller traders. As a result, real-time tracking of Bitcoin whales allows retailers to make profitable trades in the midst of a volatile market.

Despite Bitcoin’s global and decentralized nature, whale tracking and surveillance simply boils down to accessing easily accessible trading data from crypto exchanges and services. There are four primary ways to track whale activities, which include monitoring known whale addresses, order books, sudden changes in market value and trading on crypto exchanges.

Surveillance of known whales gives an advantage to smaller investors as the probability of coming across a whale trade increases significantly. Furthermore, keeping track of market changes via order books and trading on crypto exchanges indicates incoming whale trading, which can be exploited for profit during volatility.

The crypto community also uses free services that inform investors about successful whale trades, often including information about the sender’s and recipient’s wallets and the amount. One of the most popular services for automatic whale trader tracking is @whale_alert on Twitter, which sends out alerts related to large transactions as shown above.

Related: Bitcoin whales are still “hibernating” as the BTC price approaches $ 21,000

In a recent market update, Cointelegraph revealed that data on the chain indicated that the largest Bitcoin holders were reluctant to trade at current prices. BlockTrends analyst Caue Oliveira supported the findings above by highlighting a “hibernation” that continues among the whale wallet. He added:

“Institutional movements, or often called ‘whale activity’, can be tracked based on the volume of transactions moved over a short period of time, both denominated in BTC and USD.”

In addition, many altcoins continue to mimic Bitcoins bearish trends as whales wait for a greener feel in the crypto market.