There are dedicated solutions to track the actions of crypto whales. These solutions can provide analytics on whale actions and, in some instances, can also make investment/trading decisions for the user.
Crypto traders and investors constantly track the amount of cryptocurrencies going in and out of exchanges. When a cryptocurrency like Bitcoin or Ether (ETH) is moved in large quantities into an exchange, it is expected to see some sell action resulting in a fall in price. Conversely, if cryptocurrencies flow out of exchanges into wallets, it is considered a precursor to a rise in price.
This is because when exchanges have a high net outflow of cryptocurrencies, they have reduced supply resulting in an increase in price. Oftentimes, a whale could buy cryptocurrencies on an exchange and move them into their wallets in large volumes. This could result in a bullish price action for the crypto.
In some scenarios, whales may choose not to disturb the markets by buying or selling on an exchange. They would do an over the counter (OTC) transaction between two wallets. For instance, they may send Bitcoin to a wallet that will send USD Coin (USDC) back, resulting in a sale of BTC without the market spotting the transaction.
When the blockchain records a large transaction, investors can study the transaction and pick up the wallets involved in it….
