Whale Watching as the Year Comes to a Close

There are three facts about the markets that you've probably not considered:

  • In bull markets, it is quite easy for a novice crypto trader to get lucky and outperform professional traders from riding a huge pump of an under-the-radar altcoin
  • In bear markets, it is quite easy for a novice trader to outperform professional traders simply by freezing up and doing nothing while market caps collapse
  • In flat markets, like what we're seeing now, it is very rare for a novice trader to outperform professional traders. Attention to detail on fundamental and technical indicators are at a premium at times like these, and the skill gap between trade strategies widens considerably.

Exhibit A: Take a look at just how flat Bitcoin and Ethereum has been over the past 30 days. And as you take a look over to the right of this chart, look at how much price returns have massively varied from asset to asset:

Price returns for past 30 days, sorted by largest market caps (on left)

This is why these flat market conditions, where Bitcoin has ranged tightly between $15.6k to $17.1k for a month straight, are so important to pay attention when everyone else is snoozing and waiting for the next bull run.

There are several factors that go into each of these assets either surging or purging this past month. But keeping a very keen eye on whale behavior is one of the smartest things professional traders do to ensure they are still taking advantages of large accumulations and dumps from the addresses who influence markets the most.

In this article, we're taking a look at assets where the key large-tier addresses are either accumulating or dumping their assets aggressively. By doing so, we can find where some divergences or forming for upcoming bullish or bearish outbreaks.

By all means, we want to point out that there is no perfect science to identifying what any asset's perfect "whale tier" is. But generally, with the exception of massive market caps like Bitcoin or Ethereum, almost all assets have their most impactful traders holding the equivalent of $100,000 to $10,000,000 in that coin.

Any address with less typically doesn't have enough capital to move markets significantly on major buying or selling. And anything more typically has a high likelihood of being an address that belongs to an exchange. And exchanges don't really hold any bias toward adding or dropping the supply they are holding. They are there primarily to act as a liquidity source to allow traders to quickly and efficiently exchange that asset as instantly as possible. Because these addresses allow their respective exchanges to make money.

Note that assets have remarkably different market prices. So to find this $100k to $10m sweet spot, we need to sometimes look at addresses holding just 100 coins, and sometimes up to 10 million coins.

Now with all this out of the way, and without further adieu, let's take a look at altcoins we have our eye on due to extreme whale behavior!

⬆️ Increasing Whale Address Balances

Compound ($COMP) - 100k to 1m COMP Address Holdings

Compound has been an asset that we really haven't heard a ton about in the mainstream since 2021. The DeFi coin hasn't gotten "out of line" too much in how it's fluctuated in the midst of the rest of the altcoin pack. That being said, we have been seeing its whale addresses holding 10k to 1m COMP encouragingly bolster their holdings by quite a bit. Over the past 3 months, these addresses have gone from holding 61% of the available supply, to a bit over 74%.

Litecoin ($LTC) - 1m to 10m LTC Address Holdings

Litecoin has actually been on quite an independent run over the past month as Bitcoin and Ethereum have treaded water. As we can see in the above chart, the large whales holding between 1m to 10m LTC have coincided quite interestingly with its price against BTC over the past year. Just about 5 weeks ago, these addresses rapidly upped their supply held from 11.3% to 15.6%.

XRP Network ($XRP) - 100k to 10m XRP Address Holdings

XRP Network's saw a big surge of its own a bit earlier than Litecoin's. Its big price pump against the rest of the markets occurred in late September and early October. And as soon as its price started to retrace, whale addresses holding 100k to 10m XRP began to really increase their holdings in a hurry. It wouldn't be terribly surprising for XRP to have another run in it, considering the increase in these whale addresses' supply held went from 16.7% to 18.3% in 5 weeks.

⬇️ Decreasing Number of Whale Address

Quant ($QNT) - 1k to 1m QNT Address Holdings

Quant has actually been quite the interesting story. It went on quite an incredible run against the price of BTC from mid-June until the end of October, doubling its price along the way. However, its whales holding between 1k and 1m QNT have decreased their supplies held over the past year, from holding just above 80% of all QNT, to just below 72%.

Uniswap ($UNI) - 100k to 10m UNI Address Holdings

Uniswap may be forming a bit of a bearish divergence at the moment. Its price against BTC has been steadily rising for 3 months now, but its key whale tier has been extremely inconsistent and holding far less since its whales holding 100k to 1m UNI peaked their holdings in late July. It may be wise to proceed with caution with an asset whose large holders are drastically changing their supply held on a week to week basis.

Maker ($MKR) - 100 to 100k MKR Address Holdings

Maker's price against BTC, as we can see above has declined just as its whale holdings have declined. Addresses holding between 100 to 1m MKR haven't dumped a ton over the past year by any means, dropping from 78% to 76% held. But the decline has been steady, and prices have reflected this gradual drop in whale holdings quite remarkably.


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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