In general, the first 500 Bitcoin holders can be considered whales. We will discuss how to protect your portfolio from whale repetition in today’s markets below.
Great fear of whales
In the world of cryptocurrency whales move their assets to cryptocurrency markets and thus manipulate price. The best expression for this phenomenon is pump and dump, where huge wealth is shifting to lower the crypt’s price by rapid volume sales.
This will create a selling panic under heavy cryptocurrency volume sales. Panic sales will trigger a sudden drop in prices for the cryptocurrency. Retail investors are thus threatened by panic sales caused by an unknown price drop.
Retail investors assume at this point that there are negative reports to which they unfortunately do not have access. They expect whales to receive special information and sell quickly before the news reaches the world.
To sum up, whales watch panic sales and at some point they start buying cryptocurrency at a lower price.
How to protect your cryptocurrencies
The phenomenon of pump and dump may not only concern cryptocurrencies, but also gold or weakly traded stocks. Unfortunately, because of the decentralized nature of Bitcoin and other cryptocurrencies, it is impossible to blame anyone for dirty trade.
The best way to protect yourself from this type of trading is to take advantage of the situation and make purchases during a sharp correction. As the cryptocurrency market continues to mature, the problem will resolve itself. Over time, whales will be less likely to perform similar practices.
We also recommend watch Whale Alert, which highlights large movements.
How do whales manipulate with the prices? Click here for details.
Pump and dump problems will disappear in themselves as the cryptocurrency market will mature. Thus, whales begin to lose money when they try to make these deals. Smaller marketers will not be easily fooled by panic sales. We definitely recommend never panic.