Crypto Academy / Season 3 / Week 1 - Homework Post for [@wahyunahrul]―Whales - The Driver Of Cryptocurrency Value

masumrbd (66)Beginner[2]in SteemitCryptoAcademy • 3 years ago

Thanks to professor @wahyunahrul for this wonderful lesson about "Whales - The Driver Of Cryptocurrency Value". Today’s lesson highlights how whale derives the price of the cryptocurrency market which was a new topic for me. I got to know a lot of information. I liked today's lesson very much.Now, I am ready to complete my homework task. Let's get started:

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

By whale in cryptocurrency we mean big traders. Here whale can be a single person or a group. When whales trade, they trade a lot of volume, it can be buy or sell any tie. We know that market price is more or less based on demand and supply. So when whales buy a coin, there is a shortage of supply in the market because they trade together in large volume. In this case, the price of coins began to rise in the market.

Similarly, when whale sells coins, the supply of coins in the market increases and the demand decreases. Due to which the price of the coin goes down. So here we see that whale ra manages the cryptocurrency market. If they want, they can reduce the price of the coin and increase it. This is why small investors are afraid of whales. Because they trade depending on the movement of the whale. If you do not understand the movement of the whale then small investors may face a lot of losses. For all these reasons, small investors are afraid of whales.

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

Yes, It is possible to take advantage of the existence of the whale that is so feared. Because those who trade in cryptocurrency trade with different types of analysis. Technical analysis is one of them. Technical analysis is very useful for a short trade. Small investors follow such a strategy. They monitor market movements and find support and resistance. In this case, by looking at the volume, one can understand whether there was an entry of a whale. In this way, there is an opportunity to make a profit if you trade with an advantage by taking out a signal.

The cryptocurrency market is much more volatile so anything can happen here at any time. The signal extracted from the whales exist with the idea may not always be effective, in which case there is a possibility of loss. That is why a market analysis is very important. The better the market analysis, the more advantage it can take.

3). 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)

First of all, I visit https://coinmarketcap.com/ and checked the rank of the top 10 coins. Here is the list I found. I have to select a coin that is not ranked in the top 10 coins. Except for those top 10 coins I choose KNC.

The chart below is made from the 4 hour time frames for the month of June. Here I have tried to show four phases.

Accumulation

This is the first phase during which the price of coins is very low and whale coins are collected. Many small investors who used to buy coins at higher prices panicked and sold them at lower prices. This is how the accumulation phase continues. Then when the collection of whale coins is completed, the uptrend phase is seen.

Uptrend

In the uptrend phase, the supply in the market is reduced and the demand for coin increases and the market continues in bullish condition. In this phase whales increase the price of coins by buying more.

Distribution

In this phase whales sell their coins. They do not sell all the coins together. Sells coins very intelligently. Otherwise the market will go to the downtrend very soon.

Downtrend

If you start selling whale, the demand in the market decreases. Then the market continues to downtrend. Small investors who buy coins in the distribution phase lose.

4). 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.

If I were a whale I would invest in Theta coin. Above I have given the chart of Theta coin. There you can see how it is fluctuating. If you want to make a profit by trading in cryptocurrency, you have to find the most volatile coin first. Because you can't make a profit by investing in a stable coin.

Whale always finds the most fluctuating coin. Then make a profit by trading in them. It is possible to gain more from fluctuated coins than from other coins. Any trader finds such coins before trading.

5). 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)

In the above graph I have tried to show the future phases of Theta coin. This is my own analysis. First I showed an accumulation phase. This will be my buy zone, here can be bought in two steps. So I marked buy 1 and buy 2.

After the accumulation phase, it is necessary to reduce the supply in the market and create uptrend condition. Then when you reach the market in the distribution phase, you have to take profit there. If you sell all the coins and take profit, the demand in the market will decrease and downtrend phase will come.

In this way I can make profit by using different phases correctly.

Conclusion

I learned the details about whale from today's lesson. It was great to learn something new with what I knew before. In addition, the professor told us to find our own coins and do research, but I became aware of more new things.

It is important to know what a whale and how they derive the cryptocurrency market before doing any trade in cryptocurrency. Because otherwise you have to come here to make a loss. I think today's detailed discussion on these issues will be fruitful for everyone.