If you were there during the bullfight, you must have heard of the term “crypto whale”. We understand that many newcomers to the crypto community may have little to no knowledge of the time. So we wrote a two-part series to explain the concept of crypto whales and how they work. In case you missed the first part, you can find it here. We talk about how whales affect cryptocurrencies and also show you some of the giant whales.
This time we’ll look at other things, including why Ethereum whales are buying Shiba Inu.
How Crypto Whales Work
Crypto whales are commonly used to refer to institutional investors or individuals who own many cryptocurrencies. For example, a small number of investors own a significant amount of Bitcoin. These rich guys are known as bitcoin whales.
Whales are like the crypto elites. You have the means to make big purchases; sometimes, your buying and selling strategies control the market. Whales have always dominated the emotions of the market. But how do they exactly work? So, whales affect both the liquidity of an asset and its price.
In terms of liquidity, when a large concentration of cryptocurrencies is kept in a wallet, instead of being used, fewer coins are available. Therefore, the liquidity of this asset is reduced. Whales can also increase price volatility when moving a large amount of crypto in a single transaction. For example, when a bitcoin holder tries to exchange their cryptocurrency for fiat, the lack of liquidity and the massive size of the trade put pressure on the price of bitcoin as other market participants can track the transaction. Other investors, in particular, are on high alert when whales are selling, looking for signs that they are “selling” their assets.
The average amount of a given cryptocurrency deposited on exchanges, or the exchange’s entry potential, is a standard indicator that cryptocurrency investors monitor. If many whales visit the business and the average number of coins per transaction exceeds 2.0, they will probably start throwing them away.
Why Ethereum Whales Are Buying Shiba Inu
Whales flex their economic muscle by buying large amounts of currency. Ethereum whales seem interested in one of the Shiba Inu meme coins. Shiba Inu continues to hold the most prominent USD-valued position among Ethereum whales, according to WhaleStats, with large wallets worth around $1.3 billion worth of SHIB. This great dominance can be explained by the whales’ ambition to dominate the circulation of the asset market.
One of the reasons for Ethereum whales’ bullish behavior may be the increasing burning rate of SHIP tokens. Although the number of coins in circulation has not yet declined significantly, a fierce burning campaign could eventually increase the price of Shiba Inu. Also, the release of the Shibarium Layer 2 solution is perhaps the most important reason. The Ethereum Whales believe that Shiba Inu has the potential to be successful in the future, like Dogecoin.
Where to Find Crypto Whales
Whales prefer to remain hidden, but you can track their activity through on-chain analytics. This includes monitoring crypto whale trades by examining blockchain transactions: view transaction values and block sizes. Therefore, a high transaction value means a significant amount of the asset was exchanged. A large block size represents a large amount of data.