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How to Track Bitcoin Whale Movements

In cryptocurrencies, many terms might seem complicated to understand at first glance. We wanted to introduce you to the concept of Bitcoin Whales, their importance, and how to monitor their activity and movements.

What is a Bitcoin Whale?

To begin with, a Bitcoin whale is a person or entity that possesses large amounts of Bitcoin. Whales, in theory, own enough cryptocurrencies to manipulate Bitcoin valuations if they wanted to. At least in terms of potentiality, they could do so. However, this does not imply that this is always the case.

Large crypto holders may try to sell their assets in smaller amounts over a more extended period to avoid drawing attention to them. They can produce distortions in the market, causing the Bitcoin price to rise or fall unexpectedly. Whales create the conditions for speculation among small fish, resulting in a vicious cycle in which prices become detached from the underlying fundamentals.


How to track the movements of Bitcoin whales?

Tracking or monitoring whale activity allows us to see their trading patterns. If Bitcoin whales reduce their holdings as the price rises, one could infer that the market top might be near, significantly if retail traders increase their holdings simultaneously. There are many ways to track Bitcoin whale activity or movements, but some of the most common or relevant ones are here.


On-chain analysis for whale tracking

When monitoring whales, we consider whether they contain much Bitcoin. You can identify these wallets on the blockchain and monitor their activity. Any transaction to/from these wallets may be a vital sign to every trader. Another metric that can provide helpful information is the overall increase or decrease in compliant wallets.

Whale transactions with potential market implications.

Wallet-to-exchange transactions

Exchanges are the most common tool for trading. Any inflow of coins from a whale into an exchange usually means that the entity has deposited coins into its exchange account and intends to trade them in the short to medium term. A large deposit of BTC generally implies that the whale is considering selling cryptocurrency in the market. In contrast, a large deposit of a stablecoin, such as USDT, may indicate a possible purchase.

Exchange-to-wallet transactions

Large cryptocurrency holders almost always prefer long-term storage due to its greater security. A large withdrawal from a wallet on an exchange to a whale wallet may indicate that the entity has no intention of selling those coins in the short term. They also reduce the supply of coins on exchanges, leading to price appreciation, especially in high demand.

Inter-wallet transactions

Apart from exchanges, whales often act for reasons related to privacy and liquidity, as OTC (Over The Counter) trading services can often handle large trades while mitigating any liquidity issues. OTC trades are mainly untraceable, and their price effects are usually less prominent than regular trades. However, an OTC trade could be a significant transaction from one whale wallet to another.


Bitcoin Whale Alerts

While the above is true in many cases, these transactions do not guarantee any specific outcome. For obvious reasons, whales know that market participants track their transactions. Consequently, they may make trades of this type to unleash reactions in the market. We show you some tools to help you see these moves more quickly.

Whale Alert is a Twitter account and website that publishes large transactions on major blockchains and known wallet addresses. The service has an API feature for those who want to customize their data collection. However, Twitter posts should be sufficient for general monitoring. This tool facilitates the task of monitoring blockchains and whale movements. In that sense, it acts as a kind of database.


Specialized data analytics accounts

Over the years, analytics platforms have appeared that do all the work for their users and provide access to numerous advanced metrics and filtering options. Some of the most popular resources are CryptoQuant and Glassnode, both of which have custom metrics. However, neither platform is entirely accurate, and there are cases where they attribute the data to the wrong actor.

Another one we like to talk about is Whalemap on Twitter and their website. It is one of these data analysis platforms but specializes in Bitcoin whales.

Final thoughts

Tracking whales help to understand and contextualize market movements and patterns. However, your investment and trading decisions should not rely solely on these methods. While whale tracking might give you an edge, it is not the most reliable information. Ultimately, your investment and trading decisions should be supported by your research, not just by monitoring Bitcoin whale movements.

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