Crypto Academy / Season 3 / Week 1 - Homework Post for @Wahyunahrul by @kelechisamuel

INTRODUCTION
I am really glad to participate in the crypto academy season 3-week 1 homework post, it has been a huge confusion to me on the volatility of coin, their rise and fall respectively until I went through this lecture, I really learnt a lot and I will be dropping my answers to the homework post below

I am @kelechisamuel and this is my homework post for @wahyunahrul

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

Just as we were taught in class about the presence of whales in the crypto currency world, they are people who own a large bulk of crypto currency and enforce dominance on the coin they hold.

In other words, the whales single handedly create the bullish and the bearish cycle, when they sell or buy bulk currencies

Why whales are feared by small investors

The system of the crypto currency follows a pattern of demand and supply because the whales invest in crypto currencies that are limited they tend to cause an increase in the cost of the coin when they buy in bulk likewise when they sell in bulk the price falls following the demand and supply rule, the higher the demand the higher the price and vice versa

To that effect the small investors are so afraid of the whales especially when they decide to sell as this will create a bearish graph on the coin and lead to a reduction in coin price, this will be a major loss for small investors as this will increase the supply of the coin and making the coin price to be reduced

So for instance I bought a ripple coin in the month of March when it was valued at 1800 per NGN or $3.6 and due to the effect of whales, the coin falls to about 883 NGN which is about $1.3, you can look at the image below

Such scenarios are the reasons that small investors are afraid of whales.

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

The answer to this question is yes, definitely we can take advantage of the existence of whales as their existence also benefits and a few times works in favour of small investors

It is the heart desires of every whale for their coin value to increase except the want to pull out of the system completely which in most cases they hardly do, so in that case we can always whale watch

Small investors who invest on a long term make the most advantage out of them, after the whale like cycle of decrease and increase, so small investors could always watch the market and buy when the whales are selling then sell when the whales are buying in that sense, they buy when the coin is low and sell when the coin is high

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)

In other to answer this question correctly, I will be taking a screenshot shot of the current top 10 as at the time of this assignment

This screenshot is gotten from coinranking

For this question I will be using the NU/USDT Pair which is not among the top 10 to show an example of the whale cycle occurrences on the chart

Now looking at the chart above we can clearly see the 4 different stages that I will be explaining in details

• Accumulation Phase:-
  The accumulation phase happened around early 2021 as we can see above, as we can see the value of the coin drops drastically below $0.2. The accumulation stage is usually a weeping period for small investors as many of their assets are usually lost

• Uptrend Phase:-
  The Uptrend Phase started around January and hit a peak of almost $1 per coin towards late February. This change took over an 80% increase as shown in the screenshot above, showing that the whales have started buying up assets to force the increase of the asset

• Distribution Phase:-
  For me I see this stage as a tricky stage, at this point a few whales begin to sell their assets in little quantities forcing the market to look stable when they prepare for a major downward trend.
  The distribution stage is usually short as small investors will be tempted to buy the asset, which leads them to the next stage.

• Downtrend Phase:-
  At this stage, the Market is down and small investors sell the little remaining so as not to lose everything and this is the moment they will discover they have been tricked by the whale

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.

I really wish I was a whale in this context, assuming I am a whale, I will invest in Stellar (XLM)

Since the year 2021 stellar has given an amazing run with over 400+%, stellar is Just like the PayPal of the crypto currency and it's a technology that has come to stay

As a decentralized platform, it makes transactions easier and cheaper, which is a long lasting impression that might kick traditional banks out of business

Also stellar has huge investors and partners that give me assurance that the coin has come to stay and will give us a huge return before the end of the year 2021

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

Just like I explained earlier the best way to take advantage as a whale is buying in bulk during the accumulation stage as everyone, most especially the small investors, so at this stage I will buy as many as I can

I zoomed into the chart so we can have a better view of what I am explaining.

The accumulation stage is the best time to buy an assets since the price is relatively low, then one can buy again during the uptrend although it's a bit risky

The distribution stage is a tricky stage and as I said earlier, other whales will be begin to release bulk assets as they also try to maintain balance.

At this point as a whale I will sell and make massive gain, while I wait for the downward trend to start the cycle again

CONCLUSION

The lecture was really educative as I learnt a lot knowing that the whale cycle is almost to that of a composite man, though I really don't know if there is a difference but if there is any I plead with @wahyunahrul to leave an answer in the comment box

I also learnt the whale watching system, which I will be very concious of the system. Lastly it feels really good to be back on the season 3

Thanks for reading through

Cc
@wahyunahrul