Mass Volatility to Come: What are the Bitcoin Whales Doing?

Bitcoin whales might be looking at a crucial point at the moment in the market. Depending on the way the coin falls, it is possible that this could either shoot Bitcoin price up to see healthy growth or send it crashing if it fails to break new points of resistance. According to researchers, it seems that where Bitcoin price is sitting right now could be an important zone which could have a major impact on the market.

What is a Bitcoin whale?

Bitcoin Whales are referred to as the investors or market players in the Bitcoin and cryptocurrency industry which hold significant funds. These are often institutions and investment funds, but can also be large-scale individual investors which massive amounts of moveable assets in the market. Some whales are known but, owing to the anonymous nature of Bitcoin, not all of the large investors have stated that they are behind the Bitcoin wallet address. The most noticeable Bitcoin whales who have stated that the wallets belong to them include:

  • Pantera Capital
  • Bitcoins Reserve
  • Binary Financial
  • Coin Capital Partners
  • Falcon Global Capital
  • Fortress
  • Bitcoin Investment Trust
  • Global Advisors Bitcoin Investment Fund

It’s worthwhile noting that these are institutional investors who have large amounts of assets available to play with. This means that the whales have two key characteristics in the Bitcoin market:

  1. They have a huge buy-in to the cryptocurrency market (over 1,000 Bitcoin to be a small whale)
  2. They have the ability to move the market if they decide to buy or sell.

Since Bitcoin whales have such a large capital mass, there is a lot of room for them to move the market, like a whale might be able to make a massive splash. This leads to the potential for market volatility as a result of one or two investors stirring the water.

What is a Bitcoin whale cluster?

Whale clusters occur when these large-scale investors buy Bitcoin but do not move, spend or trade the Bitcoin. This is typically represented by a particular price region where Bitcoin whales buy and might decide to sell if the market does not move or shows bearish signs. As explained by Whalemap:

“Bubbles show locations where unspent bitcoins were accumulated. The larger the bubble, the more unspent bitcoins are located there. P.s. Unspent means these bitcoins have not been moved since they were ‘inflowed’ to a whale wallet.”

Clusters generally happen when it seems as though the market might increase in the short- to medium-future, so whales buy to make a profit later. If the price of Bitcoin doesn’t increase or threatens to sink, whales will want to sell-off at the mark where they bought Bitcoin – the breakeven region.

What impact does a large-scale Bitcoin investor have on the market?

Since the Bitcoin market has such massive players in the field, there is room for market manipulation. If whales decide to buy in, it shoots the price of Bitcoin up which attracts smaller investors who hope to capitalise on the possible profits. However, the possibility of whale investors selling to make a profit is not slim. When a whale sells off, it impacts the market negatively and crashes the price of Bitcoin. New smaller investors tend to take their cues from market sentiment and will sell if it’s low, even if it’s at a loss. It’s the concept of “buy low, sell high”, which is commonplace in Bitcoin trading.

What are whale clusters doing right now?

At the time of writing, whale clusters are looking at resistance around the $10570 USD mark, which means they are either buying in have the potential to want to trade-off at this price. Should there be a break above this point, the market could be looking at a short-term rally. If Bitcoin tests breaking and is rejected, the market could be looking to fall. According to Whalemap, a research firm which analyses data from Bitcoin whale wallet addresses and activity, it’s possible that Bitcoin will drop to $9800 USD if a retest fails to break the resistance barrier.