Hello steemians, I am very delighted to be part of the steemit crypto academy, which will be of great help to both the old and newbies in the crypto space to have vast knowledge about the different cryptocurrencies and how they can get opportunities from the space. I will be participating in this crypto academy until the very end as I start with today’s class on Whales- The driver of Cryptocurrency value by professor @wahyunahrul.

Based on the understanding that you’ve gained from this class, explain why whales are so feared by small investors?

A cryptocurrency Whale is a general term used to describe an individual or entity having a very large amount of cryptocurrency and can cause a notable impact on the crypto prices either by selling or buying large amounts of the particular coin they hold. If we look at the current market cap of cryptocurrency, we see that it’s currently hovering around $1.7 trillion and Bitcoin makes up about 1 trillion of this amount which was a huge milestone back in February. We can’t deny that this is a huge amount of money but if you compare it to the stock market, for example, which was evaluated around $15 trillion back in December 2020, it puts things in perspective. We also present in all markets but the relatively small market cap of cryptocurrency makes it a great ecosystem for them. Basically, the less liquid market, the easier it is to manipulate its price.

Being a cryptocurrency whale opens new responsibilities like orchestrating a crash by selling a large amount of a particular crypto coin. This kind of market manipulation negatively affects the small investors who have been caught up in a trade to panic. Panicking while trading cryptos could lead to selling at lower prices which results in huge losses.

Therefore, the fact that the whales have large amounts of a particular asset which makes them easily control the market prices keeps the small investors always on the lookout hence causing fear among them.

Will we be able to take advantage of the existence of the whale that is so feared?

Nobody can deny that 2020 and 2021 have been great years for cryptocurrency the fact that we have reached new all-time highs. Crypto is maturing slow and steadily thus people have started to take it more seriously which was shown by the huge new wave of retail investors. The existence of whales in the crypto space is scary the fact that they can cause a huge impact on the market prices depending on what activity they are involved in (buy or sell).

This makes the crypto markets very volatile which is to some extent advantageous to a small investor to making huge gains on the condition that they have made research and are acknowledged about the specific crypto they are about to invest in and not just gambling with their small investments.

Find an example of a whale’s cycle on a cryptocurrency chart and do a detailed analysis of the phases in the cryptocurrency chart (don’t take the cryptocurrencies that are ranked in the top 10 as examples).

The current top 10 cryptocurrencies based on coinmarketcap.

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With reference to the screenshot above, I have chosen the coin steem. It is currently ranked number 176 on coinmarketcap with a circulation supply of 391, 918,233 Steem and a 24hr trading volume of $4,719,882. Lets dive in;

Accumulation phase.
This is a phase where the smart money is getting out of their short and accumulating positions on the long side. The accumulation zone is a very choppy zone with a lot of false signals and it’s where moving average players get completely chopped off. Traders who chose to use oscillators make good results for a short period of time until the phase ends. Here, whales need to have large orders filled without ringing too many bells to tell everybody what they are exactly doing. They do this by hunting for stop losses through trace arranging and then put their stop losses right at the last low if they want to go long for instance.

The Uptrend Phase.
In this phase, the whales begin to largely buy a particular crypto coin in a very short period of time which will make the market go in the uptrend direction also known as the bull market. The small investors because of FOMO (fear of missing out) also join in to buy the coin that is going in the uptrend direction to gain some profits from the crypto market.

Distribution Phase.
This is the market phase where the release of an asset supply is happening in clump over a period of time thus wales taking their profits from the market. The distribution phase is the exact opposite of the accumulation phase and it is usually done by the whales who have previously accumulated these assets.

Downtrend Phase.
In this phase, there is a massive sell-off of a particular crypto coin which will make the market prices to go on a downtrend. Usually, the small investors are caught in trades and later panic sell off their assets to take the small or no profits at all from the market.

If you’re a Whale, what cryptocurrency would you choose to invest in or trade (except those that are in the top 10), explain why you chose that cryptocurrency.

Ever since I joined steemit in 2018, I have seen a lot of potential in the steem blockchain and hence as a cryptocurrency whale, I would definitely invest in stem.

Why I chose Steem?

The steem blockchain is a very huge investment opportunity because it helps long-term investors accumulate more steem from steemit. This is done in a way that, the steem blockchain currently rewards curators inform of steem power which will, in turn, increase your initial investment in the steem blockchain.

Investing in the steem blockchain also enables investors to support newbies in the crypto space which is done through curating the content that they share on steemit. This kind of extended support helps in bringing more newbies in the crypto space because of the vast opportunities in the steem blockchain.

Investing in the steem blockchain will also bring massive gains in my portfolio the fact that the steem price is currently at its lows from the time of its all-time high.

Do a kind of analysis as a whale with the phases that I explained earlier on the chart of your chosen cryptocurrency, show where you will start buying the cryptocurrency, and explain how you will take profits. (Screenshot required)

This is a brief analysis of how I will start buying steem as mention above to gain my profits as a whale.

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Accumulation Phase.
After I have done my research about the coin, I will start purchasing the coin in small amounts at this phase (shown in A above). I will gradually continue to purchase steem so as to increase the market activities of the prices.

Uptrend Phase.
After the accumulation phase, when the lows are broken and stop losses are triggered, I will buy the coin in large quantity into the sell action caused by the exiting trades of the small investors (shown in B above). This will massively increase the price of the coin and it will go into an uptrend.

Distribution Phase.
At this point, I would have reached the target value of the coin price. The massive uptrend of the price action will create news around which will attract a large number of small investors to buy at higher prices. The small investors will keep buying as I gradually take my profits from the market (shown in C above).

Downtrend.
In this phase, the small investors will realize my activities which will decrease the demand for the coin and hence increasing the supply. The prices of the coin will massively go into a downtrend because the small investors would be panic selling to take the small profits or losses. This will again give me an opportunity to buy the coins at a low price (shown in D above).

In Conclusion.

The fact that the Whales’ activities on the cryptocurrency markets can cause both a massive downtrend and uptrend, it can also be of a great opportunity to the small investors to get massive gains. This can only be possible for the small investors if they first do vast research on the particular assets they opt to invest in, know the best entry points and take profits to improve on their crypto portfolio.

Therefore, I would like to thank professor @wahyunahrul for coming up with such an amazing lecture about whales which has helped improve the knowledge of steemians about Whales in the Crypto space.