Steemit Crypto Academy Season 3 Week 1 | Whales - The Driver Of Cryptocurrency Value by @offia66 for professor @wahyunahrul.
Greetings Steemians.
Thank to professor @wahyunahrul for the impact laid. I learnt a lot. Thanks again prof, I am really glad I can finally participate in the academy.
Homework Task
Designed on [canva]
1). Based on the understanding that you've gained from this class, explain why whales are so feared by small investors?
- Before we push further on why whales are feared by small investors, who is referred to as a whale whale 🐋.
Whale: based on my understanding I would say a whale is a wholesaler of cryptocurrency because they buy in bulk and sell out in bulk. Whales act as paddles to the price of cryptocurrency.
- The major reason why whales are feared by small investors is there ability to affect the price of a particular coin in there possession. Just as I stated earlier that whales buy in large quantities (bulk) and sell out in large quantities and based on the class/lecture it states that if a coin is sold out in large quantities the price tends to drop and if it is bought in large quantities then the price would go up/rise and the chart will be green and this always puts a smile on the face of small investors. Just as the whales of the ocean are big so the Crypto whales are a very big influence to cryptocurrency and it's price. Once a whale sells out his coin the price of Cryptocurrency is exposed to a dip.
The the dipping of a coin is what every small investors fears and since whales can cause a coin to dip or drop in it price I would say that's why small investors fears the whale 🐋.
Whales can affect the price of cryptocurrency when they:
- Buy cryptocurrency and.
- When they sell cryptocurrency.
2). Will we be able to take advantages of the existence of the whale that is so feared?
Designed on canva.
The answer is yes we can take advantage of whales.
we can take advantages of whales once we keep them monitored by:Knowing when they (whales) intend to buy (accumulate) a coin, that is to say small Investors can take advantage of a whale at accumulation stage, accumulate while they too accumulate. Every whales aim in the business is to make profit and as we all know after large quantities of a coin is purchased the price of the coin increases, in turn this brings profit to the whale then the next thing they do is to sell out so small Investors too sells out to get a little profit.
small Investors can buy when whales are selling and there's a decline in the price of cryptocurrency and sell out when whales are buying. There's an adage I have it says "buy in the dip" this is the means by which small Investors can take advantage of the existence of the whale that is so feared.
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)
Below is a screenshot of the top 10 cryptocurrency just as instructed by the professor.
Gotten from coinmarket
for this question I will be talking about our own steem since it is not listed among the top 10 leading cryptos.
Taking a look at this chart it has 4 labels which includes:
- Accumulation: The accumulation of steem took place from around 03-july-2020. The accumulation stage usually results to a dip (a drop in price). We can see the price dropped down to 0.2$ per steem which would be a loss to small Investors. The accumulation stage actually shows that whales are buying that cryptocurrency.
Uptrend: in this phase permit me to say whales are tricky, they start buying a cryptocurrency in bulk just to lure other Investors mostly small Investors into buying or investing in the same coin that's already in there possession.
Distribution: At this stage whales tends to take profit out of the Cryptocurrency purchased by selling out the coin gradually so as to achieve there aim for why they got into the business which is to make profit.
Downtrend: this is the last stage of the whale cycle as the price of the coin drops drastically displaying a bearish trend. This is caused because there's large amount of supply and small amount of demand as both whales and Investors tends to sell out the Crypto/coin.
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 was a whale I would love to invest in Dash coin.
In the recent weeks before the dip was experienced, dash coin made waves which was a cause for alarm and a reason to invest in it as it has shown that in the nearest future it will surely bring profits to those that invested in it. Most of all since it is Decentralized and investors are not forced to follow stipulated rules, they can sell off and buy at there own convenient time with the aim of making profit. Dash will bring profit to it's Investors in the nearest future that's why I would love to invest in it.
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)
- Here we have the dash coin chart.
In this accumulation phase that's where I would purchase this particular coin because at the same phase the whales are also buying.
after accumulation as a whale the price of the coin increase.
- at this distribution phase is where I take my profit. I sell out the dash coin in my possession so as to take profit.
in conclusion a whale can influence the rising and falling of the price of a cryptocurrency. Also any small Investor that wants to take advantage of the existence of whales should monitor or study the chart of any cryptocurrency. Whales are the major causes of rise and fall in crypto market.