Whale is a term unique to the crypto space even though they exist in every market. Basically, it’s an investor with a bag big enough to affect the price of an asset. The difference between crypto whales and those in the traditional markets is that there aren’t many institutional investors yet, which means it could just be a guy in his room.
Why are whales so threatening to crypto markets?
Nowadays, you’d have to be a pretty huge whale to impact the price of Bitcoin at any random time. Still, when an order is placed in at the right price and right time, it’s relatively small impact can trigger retail traders to enter or exit in mass.
This is why the “Bart” pattern exists, and it is what people consider market manipulation. Some people’s definition of a scam is theft, and for other’s it’s simply misleading.
Market manipulation in this sense would be misleading traders to think that natural movement happened, and it’s quite effective.
Lower market cap coins are easier to straight up control. Since whales can afford to purchase or sell more of the total supply, they could at any time shift the market.
All of these examples are theoretical, based on common sense economics. It’s not like a scientists has sat down with a whale, told him what trades to make and done a study. At the end of the day, it’s folklore with a bit of logical reasoning.
How to spot a crypto whale
There are a few depth finders you can use to spot yourself a whale. Don’t assume that speculating on their transactions is a secret key to predicting price action, but there are definitely traders take them into consideration.
corn.lol is an incredible order aggregator that many people keep running passively. It includes orders from BitMEX, Coinbase, Deribit, Bitfinex, Binance and more and lets users filter sizes of orders. Additionally, it shows liquidations among the exchanges that offer leverage.
Something a bit more indirect, but also interesting is a Twitter account called Whale Alert. Most of what this Twitter account reports is movements of crypto from unknown wallets to other unknown wallets. One way to interpret these movements is if they similarly sized and followed by large movements in price, a continuation of transfers could mean a continuation of that price movement.
Again, nothing is guaranteed, but at minimum watching these orders will give you an idea of how much money is moving around in the market, and the potential power one trader can have.