Cryptocurrencies are becoming more and more popular by the day. Learning the different terms and exchanges can be hard, especially in the ever changing and growing crypto world. In this useful cryptotaxcalculator article, we will discuss what a crypto whale tracker is and how it works!
Cryptocurrencies are largely influenced by what a few large investors do with their assets. These whales, as they’re called, can cause prices to rise and fall. So it’s important for active traders to understand the market behavior of these whales.
Crypto whales are large holders of cryptocurrencies. They can be individuals or organizations who often own more than 10% of crypto. For instance, MicroStrategy owns nearly 130,000 Bitcoin (BTC) and can influence the price of BTC by their market participation. Therefore, monitoring the action of crypto whales allows you to anticipate future changes in prices for a particular cryptocurrency asset.
A well-known investor revealing their investment in an asset often results in the market following suit – whether that be by the price rallying or falling. However, when these know investors sell an asset, it’s not uncommon for the market to do so as well.
Cryptocurrency and non-fungible token transactions are publically viewable on the blockchain. The transparency of blockchain tech makes it easy to spot when large wallets, or “whales”, make a transaction. By tracking these whales, we can better predict market movements.
Cryptocurrency traders and investors are always monitoring the amount of cryptocurrencies coming in and out of exchanges. When a large amount of Bitcoin or Ether (ETH) is moved into an exchange, it usually results in some selling, which causes the price to fall. However, if cryptocurrencies flow out of exchanges into wallets, this is often seen as a sign that the price will soon rise.
Exchanges with a high net outflow of cryptocurrencies often have reduced supply, which can lead to an increase in price. Sometimes, a whale (a large holder of cryptocurrency) will buy cryptocurrencies on an exchange and move them into their wallets in large volumes. This can cause the price of the crypto to go up (a bullish action).
By studying a blockchain’s past transactions, particularly large ones, investors can discern which wallets belong to cryptocurrency whales. Investors then regularly check these wallets and the whale’s past habits for patterns that might help predict future crypto coin price movements..
Because whale tracking is done by identifying the large holders of an NFT collection within a community, it can be useful for investors who want to make quick decisions about buying or selling.
We hope this article gave you a better understanding of what crypto whale trackers are, especially as the cryptocurrency market continues to grow. CryptoTaxCalculator Australia is an essential tool for any trader in the cryptocurrency market. By using our cryptotaxcalculator, you can be sure that you are staying compliant with your tax obligations and keeping on top of your finances! Try our calculator today and stay on top of your crypto transactions!