Strategies

Crypto Whales Trading Strategy: How to Make Money?

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Retail activity is declining along with the bull market’s cooldown phase. Despite that situation, the crypto whales mean the more incredible whales have continued expanding their numbers. Such as, 18 new whale appearances appeared on July 2, 2021, along with 82,760 BTC holding valued at more than $3 billion at current prices.

In most cases, holders who hold over 1,000 BTC are known as crypto whales. However, the categorization of the whales dramatically depends on an inconsistent course of action since the crypto whales have massive holdings. So, whenever the whales make any trades, it impacts the price of the BTC as a matter of course. But that impact affects more eminently over the altcoins as they have a smaller market cap.

If you are interested in catching the big moves that crypto whales have made, the following section is for you. Here we will see the complete crypto whales trading guide, including buy and sell methods.

What are crypto whales? 

A crypto community where the individuals in that community holding crypto on a large scale are known as ‘crypto whales’ or sometimes just a ‘whale’. Crypto whales possess sufficient cryptocurrency, and exploiting those cryptos can potentially manipulate the currency value.

Whales appeared to have specific crypto over 10% of their account. However, attaining whale status is irrational. Also, having a vast percentage of the available coins in any individual account turns the account into a whale in most cases, and the community appears to agree with this notion.

Crypto whales 

Crypto whales

How to trade using crypto whales in trading strategy?

Since the whales have the remarkable gathering of wealth used in more significant purchases and sales may bring about a domino effect. While making significant buys, the organizations always try to get away from the domino effect while making large purchases to prevent the price expansion during their time of buying.

Buying and selling orders on a larger scale may cause the rapid price drive upwards and downwards. A lack of liquidity combined with larger-sized transactions develops downward pressure on Bitcoin’s price while sellers endeavor to convert their BTC holdings to cash or alternative currencies. It may be able to make retail investors panic and follow suit as they may end up with a closeout sale.

A short-term trading strategy

It has been built based on the market structure breakout. However, we are going to add the volume indicator on the chart to identify the volumes that have been traded on the breakout candle. Moreover, this strategy will apply to the M5 and the M15 time frames.

Bullish trade scenario

Short-term bullish trade scenario 

Short-term bullish trade scenario

Entry

Look for a buy trade when the price breaks above the last swing high and the volume level has rapidly increased on the volume indicator.

Stop-loss

Place the stop loss order below the last swing level with at least a 5-10 pips buffer.

Take profit

Take the profit by calculating at least a 1:3 risk/reward ratio. Or else you can take the profit by targeting the upcoming resistance level.

Bearish trade scenario

Short-term bearish trade scenario 

Short-term bearish trade scenario

Entry

Look for a sell trade when the price breaks below the last swing low and the volume level has rapidly increased on the volume indicator.

Stop-loss

Place the stop-loss order above the last swing level with at least a 5-10 pips buffer.

Take profit

Take the profit by calculating at least a 1:3 risk/reward ratio. Or else you can take the profit by targeting the upcoming support level.

A long-term trading strategy

It has developed based on the market volumes and the divergence that it forms. In this trading strategy, we will add the MACD trading indicator to identify the divergence of the market. Moreover, this strategy will apply to the H4 and the D1 time frames.

Bullish trade scenario

Long-term bullish trade scenario 

Long-term bullish trade scenario

Entry

Look for buy entry when the MACD indicator indicates a bullish divergence at the bottom of the chart and the volume level has rapidly increased on the volume indicator.

Stop-loss

Place the stop loss order below the last swing level with at least a 10-15 pips buffer.

Take profit

Take the profit by calculating at least a 1:3 risk/reward ratio. Otherwise, you can ride the trade until the next resistance level.

Bearish trade scenario

Long-term bullish trade scenario 

Long-term bullish trade scenario

Entry

Look for sell entry when the MACD indicator indicates a bearish divergence at the top of the chart and the volume level has rapidly increased on the volume indicator.

Stop-loss

Place the stop-loss order above the last swing level with at least a 10-15 pips buffer.

Take profit

Take the profit by calculating at least a 1:3 risk/reward ratio. Otherwise, you can ride the trade until the next support level.

Pros & cons

👍 Pros  👎Cons
  • Crypto whaling may potentially boost the profits.
  • Crypto whales hold a massive number of BTC alone.
  • Whaling may bring larger profits as crypto whales make larger transactions.
  • If the trade goes wrong, traders may face a larger loss.
  • Crypto whales may manipulate the market in their favor.
  • Altcoins holders may face big losses due to the market manipulation done by crypto whales.

Final thoughts

To conclude, crypto whales are the most influential and powerful investors in the crypto space. Therefore, if you are keen on having a long-term investment, you must have your blueprint for the market exit and the rock bottom profit.

Also, not just having the blueprint but enduring that is significant, keeping you from making impulsive mistakes. Putting on a stop-loss strategy and carrying that on may get you to a similar safety level while trading cryptos.

 

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