Crypto Academy / Season 3 / Week 1 - Homework Post for @wahyunahrul
WHALES
A whale is regarded to as someone or something that is very large in size, so when we talk about whale in crypto currency this is a person/people/community/organizations that invest greatly in cryptocurrencies that moves the price of an asset greatly either in a bullish trend or bearish trend.
The price of an asset solely depends on the rate of buying and selling and to which volume is bought at a particular time.
A single whale can move the whole market, let's take for example a single entity buys an asset worth $100 million dollars at once the price of the asset will increase instantly unlike when a single entity buys just $100 of the asset the significance won't be felt.
The whale has done what ten thousand people buying $100 worth of the token. Also when the whale decides to sell of the assets he or she has accumulated, this brings about a decline in the price instantly, especially when the whale sells all off instantly.
The whales play their game so well that they use the small investors to their advantage, after they must have accumulated alot of the coin, they then create a news about the coin which triggers people interest and small investors begin to buy into the project, when the whale has gotten enough profits he then begin to sell off his assets again which makes the coin price fall gradually, investors thinking this is a dip will then opt in again to increase the price a bit then the whale sells his holdings with much profit.
As shown in the screenshot above this is the influence a whale has over crypto currency.
Why are whales feared?
As we already described who a whale is and how they operate. As much as whales and big investors are needed in a project they are mostly dreaded by small investors. This can't be far fetched due to the fact that they tend to pull out of projects and this causes a stir when the price drops, so alot of small investors begin to pull out also.
Whenever they sell off their assets, everybody begin to panic and think the project will rug pull or the price won't come up again. If whales can hodl for a longer period in a project there won't be any reason for fear or panic among small investors.
The objective of whales are to make profits immediately this is the reason why they sell off immediately the price of an asset increases.
Will we be able to take advantages of the existence of the whale that is so feared?
The whales can't be held or stopped in cryptosphere because their existence is needed in crypto so as to boost the performance of a project.
Some investors also enter into a project based on the fact that a whale has been spotted dealing with such project, this gives people assurance that the project is legit and will have a very good potential.
It is quite possible to take advantage of the whales only if the small investors will
- Think like a whale: thinking like a whale in this aspect means small investors has to know the process with which the whales operate so as to avoid incurring loss during this process.
The whales follows a particular pattern just like Wycoff theory explained. The theory shows that there is always a period where the accumulation of a coin is done by the whales this period can be noticed on a chart, there is always a sideways movement of price, during this period whales buy the coin in bit.
After this period the whale tries to play with people's emotion and drops a hint about the said coin or either but a large portion to make the price movement change, then people begins to buy into the coin and this makes the price of the coin go in the bullish way, this phase is called absorption phase.
When the price has gotten to a stage where the whale is satisfied he then begin to sell the coin in bits to attract more investors who believe this is a chance to enter the trade then these investors enter again to make the coin rise up again then the whale sells largely to bring the price down finally. If investors know this then they will change perspective towards this.
- Not FOMO: when investors learn the habit of stop trading with emotions and been manipulated by the whale then we have conquered them. FOMO means fear of missing out, some investors just opt into project because a whale has gone into it and the price is rising, so they wait for a small dip which the whale will give them and then they tap in which will lead to loss for them.
- Personal research: all traders should cultivate the habit of researching before entering a project, most investors just go into projects because of the noise about the project which the whales use to manipulate them. So when investors starts researching then thsi reduces the manipulation done by the whales.
After all this has been done then small investors can use the pattern of the whales against them by knowing when to tap into a project and when yo exit the project.
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)
If I am a whale the project I will most likely key into Is safemoon. This is because safemoon has a great potential amongst shit coins. The coin has risen so fast and it's current price is at $0.0000032 having a total supply of 999,999,000,000,000 safemoon and a circulating supply of 585,535,000,000,000 and a market capitalization of $1,941,746,560 with a 24 hour volume of $20,764,888.
The team and founder behind this project have been moving the project so well even admist when there was FUD about the project the community and team members stood strong and the project is still existing.
The team has began the building of their own exchange, educational platform for crypto and also has the plan to start a charity which I am so much interested in. The project already have a shop where articles are sold and so more. This are the reasons why I will love to tap into this project.
Analysis on safemoon using the Wycoff method as a whale.
This is a day chart of safemoon, according to the market there is a downtrend followed by a sideway movement of the market. This is the right time for me to accumulate the asset. Instead of accumulating at ones my accumulation will be done at interval with 50% of the capital used first then I will wait for a little dip use 30% then the last 20% will be used when there is a sign of breakout.
After the breakout and people start plunging into the market I will wait for a little while for possibly a ×5 profit for not just myself but for those that has entered the train with me while it was rising.
My take profit strategy
My take profit strategy will be after the coin has done a good movement in the price movement of about ×5 I will then take little profit from it about 40% of my capital which will have yielded profits for me. This will be another opportunity for the late comers and those that fomo to come in which will cause another surge in the price, this time around I will take another profit but it will be a larger chunk of my capital and profit leaving just a little amount left and this will cause a great panic and let small traders take profits as well, then I will return 50% of my profit back into the asset for long term hold since I truly believe in the project.
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