[Beginner Course] Steemit Crypto Academy Season 3 Week 1 Assignment | Whales - The Driver Of Cryptocurrency Value
It is a beautiful day again to be a part of the Steemit Crypto Academy, and today, after reading through @wahyunahrul class and will be participating in the assignment. Without any further ado, I will be doing justice to the assignment.
Whales A name very popular in the financial market, just as it is popular in the cryptocurrency market, is given to individuals, group of individuals and/or entities who hold or possesses a large amount of a particular cryptocurrency. Whales are called several names but one of them is market movers because they determine where the market goes and how the market moves. Just like the ocean and the whale in reality, in the crypto market, when whales move funds, it is always a matter of concern either to buy or sell. It is always in the front of papers, in the news, and in the headings n blogs. The movement of their assets can be very disturbing as the market is often affected positively or negatively.
Whales are feared in the market by smaller investors because they have a large amount of a particular currency or have enough funds. When a whale buys into a crypto asset, the asset to see a drastic increase in price but then, when the whales, decide to remove their funds, the market could crash very hard and in some case, to a near zero.
It is expected that whales are feared, more so, they can manipulate the market in their favor. To do this, whales could set a very large order at a low price below the current price just to create panic and to create volatility in the market. Also, since the media monitors the movement of their coins, whales are very fund of moving their coins from their wallet to exchanges so as to indite fear and panic sell in the market with the hope that a large whale is either selling or about to sell.
This is very possible to take advantage of feared whales in the market. A very good example is the Dogecoin scenario of 2021. When Elon Musk decided he was going to buy Dogecoin, the price of Dogecoin went up and after this first move, people started to wait for simple announcements like when he bought Dogecoin for his son so he could be a toddler holder, and they bought into Dogecoin which made them profit.
To answer this question, I will be using LTC/USDT. Litecoin is 13th on Coinmarketcap, currently trading at $141.24. In January till the end of February 2021, LTC whales began a buying Spree where the price of Litecoin increased from $122 to $247.
When i checked on Tradingview, the chart supports the movement of whales buying LTC and making the price to increase thereby causing an uptrend
If I were a whale, I would invest in DASH coin. When it comes to investing, it has to do more with fundamental analysis than technical analysis. I will have to look at the company, the financial history of the coin, the team behind the coin, the roadmap of the coin, their ability to, and the purpose of the coin (the problem being solved by the coin/project).
DASH Coin is aimed at making the transfer of funds from one place to another fast and at a low cost. Dash is been used by over 4000 merchants worldwide and this will increase in the future. Just like Ethereum, the Dash team is known and very active.
In the nearest future, the price should increase drastically with the increased adoption of DASH making it very profitable.
Choosing Dash coin, I will be explaining the phase at which i will be buying, as well as when I will be taking profit.
As a whale, I will buy at the Accumulation phase but the purchases will be in low volume. Once I notice that the Absorption phase has been reached, I will start to purchase at a very large volume as other investors will be buying at large volume as well at this time. The buying process will be short but the volume will be very large, so as to attract other smaller investors to invest in it. At the point when people start to buy, Dash becomes Bullish. Takin profit will be at the distribution phase. At this point, the media starts to raise hype about the coin but the coin stops moving up. At this point I will pull out my capital and profit before the downtrend phase begins.
According to the chart, I will buy Dash at $39, buy more when it starts to climb and then sell at $134 which is the point the distribution phase finds resistance.
The importance of whales in any financial market cannot be neglected following the fact that they create a very large impuse in the market. While whales are very vital in the market but at the same time, they can be very manipulative just ot make the market play in their favor.
It was really great being a part of this class, I hope to be a part of it next week. Thanks for reading.