What are whales?
Whales are the biggest fish in the crypto ocean. In other words, whales are people (or organizations) who own substantial amounts of crypto, or who have the funds to make astronomical purchases. This gives them the ability to control the market by setting up buy and sell walls. The actions of buying and selling quantities that the market cannot process have profit-making potential, if executed properly.
Throughout crypto history, whales have had a tremendous impact on the market. While some whales and their actions have been identified, most whales prefer to stay hidden and operate “from the depths.”
Blocking the market with a sell wall
Let’s say that a whale comes across information that a crypto is going to become regulated, which could send its price skyward. They want to buy even more of that coin but, at the time, they deem it too expensive to be worth the investment. Owning a sizeable amount of these coins already, they can set up a sell wall to artificially decrease their price.
To do this, the whale opens an enormous sell order, putting lots of coins on the market at a price beneath the lowest price published in the order book. Everyone else selling these coins will then have to reduce their price below the one posted by the whale, or else they won’t be able to sell a thing.If the sell wall remains, the coin will be then selling for much less than before.
These colossal buy orders elevate the price at which orders are executed and trick other traders into increasing their buying prices, too. Seeing that the prices are ascending, many people will start to purchase the coin due to FOMO, or fear of missing out on an easy profit. The enthusiasm for the coin drives the price ever higher. Meanwhile, the whales cancel their buy orders before a noteworthy amount has been processed and HODL as they watch their wealth grow.
Whales are the biggest fish in the crypto ocean. In other words, whales are people (or organizations) who own substantial amounts of crypto, or who have the funds to make astronomical purchases. This gives them the ability to control the market by setting up buy and sell walls. The actions of buying and selling quantities that the market cannot process have profit-making potential, if executed properly.
Throughout crypto history, whales have had a tremendous impact on the market. While some whales and their actions have been identified, most whales prefer to stay hidden and operate “from the depths.”
Blocking the market with a sell wall
Let’s say that a whale comes across information that a crypto is going to become regulated, which could send its price skyward. They want to buy even more of that coin but, at the time, they deem it too expensive to be worth the investment. Owning a sizeable amount of these coins already, they can set up a sell wall to artificially decrease their price.
To do this, the whale opens an enormous sell order, putting lots of coins on the market at a price beneath the lowest price published in the order book. Everyone else selling these coins will then have to reduce their price below the one posted by the whale, or else they won’t be able to sell a thing.If the sell wall remains, the coin will be then selling for much less than before.
These colossal buy orders elevate the price at which orders are executed and trick other traders into increasing their buying prices, too. Seeing that the prices are ascending, many people will start to purchase the coin due to FOMO, or fear of missing out on an easy profit. The enthusiasm for the coin drives the price ever higher. Meanwhile, the whales cancel their buy orders before a noteworthy amount has been processed and HODL as they watch their wealth grow.
