Today's drop was caused by whale sales and BTC suddenly experienced more than a $2,000 loss. Investors who were seeking gains in futures lost over $100 million in just one hour. Considering that the volume dropped to the level of $30 billion daily, this figure is quite high. In the last few weeks, the cumulative volume of cryptocurrencies has been moving between $30-60 billion.
Bitcoin Whales
Have you ever wondered who is behind the large fluctuations in Bitcoin prices? The answer lies in a group of individuals or organizations known as Bitcoin whales. These people or organizations hold large amounts of Bitcoin and can significantly influence market trends. A single whale can hold thousands of BTC and can be behind sudden millions of dollars in sales that we see.
The above image shows addresses holding 1000 BTC and more. Bitcoin whales generally prefer anonymity, which makes it difficult to detect and track their activities, allowing them to easily maneuver in the market.
How do Whales Affect the BTC Price?
Whales can initiate significant price fluctuations in Bitcoin through two main methods. The first is through large buy or sell orders. For example, a whale placing a large sell order can cause a sudden drop in Bitcoin price, while a large buy order can cause BTC price to rise. The second method is market manipulation.
Market manipulation is another tactic used by whales to influence Bitcoin prices. They use several different methods, such as buying large amounts of Bitcoin to drive up the price, then quickly selling off their holdings to cause the price to drop. This is seen more often in altcoins and is more the work of organized whales. Sometimes, market makers or even the exchanges themselves can initiate these moves. One of their most important tactics is spoofing.
Spoofing
Spoofing involves placing fake buy or sell orders to create a false sense of demand or supply. Whales use this tactic to manipulate market sentiment and get other investors to act in their favor.
Once the desired price movement is achieved, they cancel their fake orders and profit from the market reaction.Whales have significant power in the cryptocurrency market and their actions can cause significant price fluctuations. Investors can minimize the impact of whale-induced price fluctuations on their investments by understanding their tactics and taking protective measures.
