Crypto Academy | season 3 | week 1- homework post for @wahyunahrul | The driver of cryptocurrency value | @doyoy

WHALES IN THE CRYPTOCURRENCY WORLD

When we hear whales, we think of a big fish, but in the crypto world, whales are the sole controllers of the market trends. What does this mean?? This means that they are investors who have a huge amount of investments in a particular Cryptocurrency. To be a whale, the amount of investment in such a Cryptocurrency must be significantly enough to have effects on the price of that token i.e either increased or decreased it.

Why whales are so feared by small investors?

Every trader in the crypto market is there to maximize as profit as much as he can, nobody wants to make losses, and if there were to be losses, it should be as minimal as possible so as not to affect the investment made on a token. As small investors, or let me say as a beginner who is new to the market; one may not easily know the movement of whales and if one is not a careful observer, one may not be able to predict the movement of whales in the market.

Whales will not tell anybody when they want to make a move, and this is one of the reasons why a trader need to follow up with the news, trends, charts and other important information relating to the crypto markets and the cryptocurrencies. Assuming I'm a small investor who just got my first salary worth $10,000 and ignorantly I put all the money on a coin. Before I put my money, I was unable take a proper finding on the crypto currency I invested in, and because of the nature of my job, I don't have time to check updates and I didn't even look at the charts to know how the market was going. Some weeks after, I eagerly and anticipating to see a boom in my investment, I am seeing a huge decline in the value of the crypto currency; from $10,000 to $100. There is no doubt, I'll surely be shocked and have a rethink of abandoning the crypto market.

What happened?

Ignorantly, to my own personal thinking and because of what a friend told me to do, that was the reason why I invested in that coin. I didn't know the whales were performing and were there setting up traps for half knowledged crypto traders like me. And when they finally removed their profit and the market went bullish, my own little investment was not enough to keep the price of that token. So now, small investors are always and majorly affected by the actions of the whales in the market because no matter the movements of whales, they are always profitable and small investors will always be ones to suffer from the steps taken by whales.

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

Maybe yes, maybe no.
Yes, if we critically study the charts of such cryptocurrency very well, we do our normal analysis and we are being careful of how and when we will enter the market, it maybe possible for us to open positions that may be opposite to what the whales have in plans. Also, if we know the amount of money the whales have invested in the market, we may if we have the capability and the capacity to put an investment that is more than the initial investment of such feared whales, with that; our investment will start to dominate the price of the token in the market and our movement will then be the decider of the price and the fluctuations of that Crytocurrency in the crypto market, by doing so, I think we can be advantageous over such whales.

But nevertheless, we are all human beings and WHALES are too smart to be predicted. Their sole aims and objectives as said earlier is to maximize profits as much as possible, and so: they already have their own plan (s) to be shared with their allies and if nothing goes wrong, their movements are known and shared to the public, in doing that; that makes it impossible for us to be advantageous over such whales.

Also, if the whales does not share his investment amount to the public, it will be very hard to predict the movement of such whale and even if we try harder we may not be able to be advantageous over such a whale because we do not know his worth and we can not tell how far he is in the market and it is said and I quote " to be able to catch a monkey one must behave like a monkey" to be able to win a whales one must think, act, and knows the path the whales intend to follow. you cannot win a person you knows no or little information about. So, if we look at it this way, such a feared whale, I guess can not be won over.

Analyzing the chart below:

ACCUMULATION PHASE :

This is stage where the whales enters the market; as usual and as expected of them, they will start buying, when other trders notices the change in the trends, they also will start buying. Unknowingly to them that they are actually increasing the profit of the whales in the market.

ABSORPTION PHASE :

At this stage when the movement is seen on the price chart, the whales will start buying more of that coin, when this is done, it will also send signals to other whales and as well as other small investors to enter the market too so
as to establish their own positions, which will later go in favor of the whales with the highest investment.

DISRIBUTION PHASE

At this stage, since the price is significantly high as may have been predicted by the whales, the whales will start selling and as they sell, they earn more profit.

DOWNTREND PHASE:

This point shows that there is quite an increase in the sell volume of that coin and by so doing, the price chart of the coin shows a bearish trend and more red signals are seen on the chart.

IF I WERE TO BE A WHALE IN THE CRYPTOCURRENCY WORLD :

I will choose the SHIBA INU coin because, the coin is yet to gain much ground like the other cryptocurrencies like BITCOIN, ETHEREUM, BNB, DOGE et cetera. Also, It will be a good coin to invest in because there is no much investors in the coin and if should invest with a huge amount of money, say $140,000,000,000 you can imagine how dominant Ill be in determining the price of the SHIBA INU coin.
Shiba Inu (shib) is one of the recently launched cryptocurrency in the crypto market. Its current price as at the 2nd of July 2021 is $0.00000838 with the information gotten from the trust wallet app. As a whale, I know my movements will definitely have impact(s) on the price of the token, but I dont really care as far as, my movements will be profitable to me

ANALYSIS AS A WHALE USING SHIBA INU (SHIB) AS A CASE STUDY:

ACCUMULATION :

At this stage, I will try and establish my position in the market, I will start buying massively as much as I can, I will buy to an amount that will make the price of the token to go as high as possible as it can because I want to be the only one whose investment will be the driver of the price and value of the coin (SHIBA INU)

ABSORPTION PHASE (UP TREND)

As Ive said earlier on, that since I want to be the sole dominator of the price of the coin; at this phase, I will increase the number of the SHIBA INU coin that Im buying, I may do so to the extent of even doubling or buying a triple of the initial quantity of the coin. By doing this, I have automatically start to give signals to other investors to come in and input their investments. With this, the price of SHIBA INU coin will then start moving up higher, as it is seen in the chart, green color will start appearing and there will now be a bullish trend which will be showing a dominant buy in the market.

DISTRIBUTION PHASE

At this phase, since Ive already gotten the attention of every trader in the market and the price of the coin too have risen. My initial aims and objectives is to maximize and accumulate as much profit as I can, at this point, Ill start selling the SHIBA INU coin that Ive massively bought slowly.

DOWNTREND PHASE

At this point, the deed would have been done already, at this point some other small investors who were not aware of my previous intentions will then realize that most of the SHIBA INU coin in the market have been sold and they start panicking, a movement that will make some of them to sell their SHIBA INU coin and in doing this, the market will enter a bearish trend which will be indicated by a downward movement in the price chart.

CONCLUSION

In conclusion, it has been established that the price of cryptocurrencies do not just go up or come down, the prices are controlled by the so called whales in the cryptocurrency world. They are ones with huge investment on a coin and their decisions to buy or sell their positions in the market determine whether the value and price of a cryptocurrency will go up or decline. Also, as a small investors adequate researches must be carried out to know which coin to buy and at what time it should be bought in order not to fall into the market and lose a lot of money.

Thanks to professor @wahyunahrul this is my homework post.