Crypto Academy / Season 3 / Week 1 - Homework Post for [WHALES - THE DRIVER OF CRYPTOCURRENCY VALUE] by @reddileep for @wahyunahrul

reddileep (67)in SteemitCryptoAcademy • 3 years ago (edited)

HOMEWORK TASK - Week 1

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

If we consider a closer look of a Market, we can clearly understand someone or group try to control the market. We can define them as whales and they are depending on small investors. Because, whales are trying to catch small investor's money and they have to do it with more attention. Because, small investors are always trying to understand the pattern of a whale and small investors are predicting very cleverly.

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Further, it is too risky when manipulating the market as many of small investors are looking closer to the market from keen eyes. Because when a whale is buying a certain amount of coin from a downtrend to give an upward pressure, small investors are trying to sell their coins as the market is increasing due to buying liquidity of the whale. So, if the total selling liquidity of small investors are larger than the whale, then the market tend to downward again due to larger selling liquidity. Therefore, the whale suffers a significant loss. That's why whales are so feared by small investor and they always try to be intelligent than small investors.

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

Of course, we can. In my life I personally take advantages from the market and day to day I try to understand the pattern of a whale by analyzing charts. Below I have explained it briefly,

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We already know whales are involving to the market for two things. Those are creating downward pressure in the market and creating upward pressure in the market. So, the both times they are trying to get benefits from small investors. Therefore, we can deeply analyze their activity chart before place an order for any of cryptocurrencies. Here I personally use https://www.tradingview.com for doing better analyzation. So, if we deeply study the pattern of a whale and if we use ways to minimize losses like stop-loss function in an exchange, we can gain a lot of advantages.

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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)

Here I have selected SHIB coin as I am personally trading with SHIB/USDT pair. When I was writing this article, the rank of this coin was #28 and below I have included my analyze of a whale's cycle from Binance Trading view.

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Now I will briefly explain it one by one.

ACCUMULATION PHASE

This is a bit complex situation in an exchange and small investors have to be more careful when buying cryptocurrencies from this type of situation. Here we can see bit up or bit down trend and it is too difficult to predict whale's decisions during this phase.

UPTREND PHASE

When whales are creating buying liquidity, we can see this situation and the market tends to upward with a big upward pressure. This is the most active period of small investors and they try to buy crypto from the start of a uptrend phase.

DISTRIBUTION PHASE

Same as the topic, this is the distribution situation in the market and it is accomplishing by selling portion of crypto from Whales. Time to time they sell their coins and we can see the trend line up and down. This is also a careful period for small investors.

DOWNTREND PHASE

Once whales are gained their profit, they sell a big proportion of coins to create a downward pressure. Then we can see the price of any cryptocurrency is decreasing. If a small investor can analyze this stage, he can also gain benefits by placing a short sell order. However, whales are always trying to manipulate the market skipping footprints.

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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 am a whale, I invest my money for SHIBA INU coin. When I was writing this article it's rank was #28 and below I have explained the reason behind my investment as a whale.

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Its is working same as the steem ecosystem and we can see it is growing fast as compared to the beginning of this token.
I supports both centralized and decentralized exchanges and we can see a high volume as it is trading in both exchanges.
Unit price is very low. We all know that bitcoin was also started with low unit price and now it is the largest cryptocurrency in the world. So if I invest for this coin, I can get a big amount of coin. Then a small change in price can make a big profit.
It has good international recognition and we can invest without risk. We can define It as totally risk free.

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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 I select the lowest Accumulation area to buy tokens as I drawn in the chart. Then I try to more and more coins during the upward phase. Then I can create a better upward pressure in the market to create buying liquidity. Finally, I can take profit from the top of the market and I release those tokens once the profit is made. So, I can create a big downward pressure due to big selling liquidity created by me. After that, I can decide to buy tokens again from the bottom of the market.

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Personally, I have faced to many difficulties due to unrecognized whales manipulations and now I have an better idea of their concept. However, we have to deeply study by analyzing charts to identify whales activities as they are trying to hidden their footprints.

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This is my Homework Post for Week 1. I have cited all image sources properly and cover image and screenshots are created by me.

Finally, I would like to appreciate professor @wahyunahrul for his effort for creating this very essential lesson and it was very interested me to follow as I personally know about the whales.

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