Crypto Academy / Season 3 / Week 1 - Homework Post for @Wahyunahrul by @kaydee009
Based on the understanding that you've gained from this class, explain why whales are so feared by small investors.
Even before birth, before fertilization will occur it’s the fastest or strongest of sperm that get fertilized. In this world that we live in rich always have major influence in the world. The world of cryptocurrency is no other different from this scenario since the rise and depreciation of the value of cryptocurrency is controlled by whales.
Value of cryptocurrency decreases or increases depending on the amount of cryptocurrency bought or sold. When high demand for cryptocurrency the value increases and when there’s high sales the value depreciates. These whales have lot of money and in turn create a bullish condition when they buy more cryptocurrency there by increasing the value. But when they intend to sell these cryptocurrency the value depreciates for short time creating a condition called bearish. The depreciation of cryptocurrency affects small investors like me since the value of my cryptocurrency is already small and if there’s a depreciation it will reduce drastically. For instance me having a cryptocurrency which currently values at 700$ for every one unit. A bearish condition can make it 250$ per unit depending on the sales. Whales are very key feature of cryptocurrency and their activities should be constantly monitored by small investors like me.
Will we be able to take advantage of the existence of the whale that is so feared?
We can take the advantage of the existence of whales by always engaging in long term investment and always noticing when their bought and sold. It very important we always take note of phases the whale use in other to take advantage of it. As a long term small investors we should buy cryptocurrency when it’s in the distribution phase since the value depreciates at that time and sell them at the accumulation phase since cryptocurrency gets high value at that phase.
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). (Screenshot Required)
This my list for top ten from trading view and I’ll be analyzing Luna coin.
I’ll be analyzing Luna coin.
source
From the chart it’s a one day time frame of the Luna coin.
Accumulation phase
At the accumulation phase it could be seen that the value of the coin is very low with an average of $2.5 hence making the chart at the accumulation phase almost flat. Whales bought more of the coin there by creating a bullish condition as they’re preparing for the next phase.Uptrend phase
Many people buying the Luna coin increased it value making creating a bullish condition at this phase. The bullish condition at the uptrend increased the value of the Luna coin and attracting lots of investors. The value raised to an average of $23.00 between March and April.Distribution phase
At the distribution stage investors started to sell the luna coin at since the value has increased. As they continue selling the coin it brings about a depreciation in the value creating a bearish condition. The price become a bit stable between March to May with an average of $16.2Downtrend phase
After the whales sell and make profits small investors at this point bear the consequences as there’s a huge depreciation in the value of the Luna coin. This is the phase most small investors fear and cost so much losses to them. The downtrend started from June with an average of $5.7.
IF YOU ARE A “WHALE”, WHAT CRYPTOCURRENCY WOULD YOU CHOOSE TO INVEST OR TRADE (except those that are in the top 10), EXPLAIN WHY YOU CHOSE THAT CRYPTOCURRENCY.
Being a whale has a major impact on the crypto market and wise decision needs to be taken in investing because lots of money will be push into it and the main aim is getting profit. As a whale I’ll first carefully analyze the market chart of the cryptocurrency then invest. I’ll invest into ethereum classic coin which currently values at $53.847 at the time 6:17 pm GMT. Ethereum classic is coin which increases at high rate when people buy more. As at February 2021 the value was at 0.2 dollars and as people started buying it $150 dollars in May which indicates with more investors the price could even go higher.
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 PROFIT. (Screenshot Required)
As whale the best phase to invest into cryptocurrency taking into consideration the Luna coin is during the accumulation phase from November to February. At the accumulation phase the value is low making it the best phase to buy the coin.
The second phase I’ll invest or buy the Luna coin is at the uptrend phase where the value also starts to increase. As a whale I’ll take my profit at the distribution phase since the cryptocurrency has reached maximum value or a value much higher than the initial purchase.
I have learnt lots new stuffs about cryptocurrency especially how it value increases and decreases with time by the influence of the whales. I thank the professor for giving us a well precise and comprehensive note about cryptocurrency.
Lectured by: @wahyunahrul.