Why Do Crypto Whales Matter & How Do Whales Manipulate Crypto?

The value of crypto coins is determined by and large through supply and demand. Meaning, if a large portion of the supply of a particular coin is held out of circulation, this drives up the price of the coins left in circulation. It follows that if a large number of coins are suddenly liquidated, the value of those coins will drop. Because of this, whales have the unique ability to essentially manipulate the crypto market for their benefit.

For instance, what if a whale wishes to acquire more coins for a cheaper price? All they need to do is start selling an impactful portion of their assets. This causes downward pressure on the market and is likely to generate a fire sale increasing liquidity for the coin at a lower price. They can then simply buy back their coins and more at cheaper prices.

They can then hold on to these coins and reduce the supply. Prices tend to rise and increase the value of the coins they have just purchased. This is a very simplistic take on how whales can affect the market, but it demonstrates the power that they wield.

Why Do Crypto Whales Matter & How Do Whales Manipulate Crypto?

The value of crypto coins is determined by and large through supply and demand. Meaning, if a large portion of the supply of a particular coin is held out of circulation, this drives up the price of the coins left in circulation. It follows that if a large number of coins are suddenly liquidated, the value of those coins will drop. Because of this, whales have the unique ability to essentially manipulate the crypto market for their benefit.

For instance, what if a whale wishes to acquire more coins for a cheaper price? All they need to do is start selling an impactful portion of their assets. This causes downward pressure on the market and is likely to generate a fire sale increasing liquidity for the coin at a lower price. They can then simply buy back their coins and more at cheaper prices.

They can then hold on to these coins and reduce the supply. Prices tend to rise and increase the value of the coins they have just purchased. This is a very simplistic take on how whales can affect the market, but it demonstrates the power that they wield.

What is the next trend in the cryptocurrency market?

The Macro Money Flow Law in the cryptocurrency field typically goes through the following stages:

Stage 1: Money flows primarily into the first cryptocurrency, Bitcoin (BTC). Media coverage highlights the price increase of Bitcoin, creating attention and attracting new participants to the market, thus generating new money flow.

Stage 2: When the price of Bitcoin rises significantly and reaches a considerable high level, a portion of the money flow shifts to major altcoins such as Ethereum (ETH), Binance Smart Chain (BNB), Avalanche (AVAX), Cardano (ADA), Polkadot (DOT), Solana (SOL), Tron (TRX), Cosmos (ATOM), Polygon (MATIC), and others. These are usually high-cap coins recognized in the market. In the crypto market, money flow into a specific ecosystem often goes through these platform coins.

Stage 3: Smart money gradually moves towards mid-cap coins, typically those ranked from 50 to 100 in terms of market capitalization. Not all coins in this group experience price increases; only projects with solid foundations or positive upcoming news tend to see growth. Positive news may include the launch of new applications, attracting new investors/partners, collaborations with industry influencers, and more.

Stage 4: Money flow starts shifting towards low-cap coins. During this stage, many junk coins or meme coins may experience significant price surges, even multiplying their value by hundreds. This stage carries higher risks as rapid price increases can also lead to quick price declines. Therefore, caution is advised, and it is not recommended to allocate all assets into such coins, as significant risks and losses may occur.

Currently, BTC and altcoins have not escaped their downtrend. Pushing the prices of large-cap coins back up at this time is nearly impossible due to the following reasons:

It takes a long time for whales to accumulate holdings and manipulate the prices to sell when there are many investors holding these coins.

It requires a substantial amount of capital to drive the prices up due to the large number of tokens circulating in the market. Moreover, the challenging downtrend period has impacted major investment funds and exchanges, as evidenced by the collapse of FTX exchange and the struggles of Tier 1 investment fund Three Arrows Capital (3AC). Even in the current period, it is a difficult time for the economy with increasing inflation and continuous interest rate hikes by banks.

This is an opportunity for memecoins that have emerged in the market, experiencing rapid price surges in a short period. They do not require significant resources or human effort to create. The majority of tokens are held by their creators. This serves as motivation for Market Makers to create and drive up the value of these coins quickly before selling them on the market. It is indeed an opportunity, but it also carries risks if we do not invest properly in memecoins at this time.

From my personal perspective, I believe that the memecoin trend will continue at least until the end of the third quarter of this year. For newcomers in the market, it is crucial to exercise caution when dealing with memecoins because if you are not lucky, you may end up losing your entire investment in memecoins.

Fiat -> BTC -> Top Caps -> Mid caps -> Low caps -> Memecoins

This is only my personal experience, and I would greatly appreciate receiving insights and experiences from everyone! :love:

What Impact Does Cryptocurrency Security Have on Economic Issues?

Since the beginning of Bitcoin in 2009, the implementation of the cryptocurrency has been very apparent to the public. The new form of currency has established itself as a popular and viable source of currency across the world because of its autonomy and convenient nature. Different forms of cryptocurrency were invented to serve as an alternative source of currency.

As of January 2020, there are more than 2000 cryptocurrencies that exist. Adding on to that, nearly 36.5 million in the US own or invest in some type of currency. Cryptocurrencies such as Bitcoins are enjoyed because they provide a more fresh and digital-based type of currency. These sites don’t utilize a third party to interact with transactions. This allows for transactions to go directly from buyer to seller. Bitcoin has also been applauded for its many benefits such as low transaction fees and faster processing. Which explains why in recent years, there have been hundreds of billions of dollars flowing into the new forms of currency. Blockchain, the technology behind cryptocurrency, has also finally taken a step towards the mainstream.

Cryptocurrency provides many incentives for entrepreneurs across the globe. It has made it easier for entrepreneurs to reach international markets rather than strictly sticking to the national markets. This has allowed sellers to create relationships and foster trusts with markets never before available and has been fantastic for developing nations. During the last three months of 2020, each day saw an average of 287 thousand confirmed Bitcoin transactions worldwide.

This new form of currency still has disadvantages that have prevented it from taking that next step. One of the major issues with online currency is the failure to protect buyers. Because the sites are against using a third party to delegate transactions, some buyers are left scammed. Currencies such as Bitcoin are only accepted by a very small group of online buyers.

Cryptocurrency has provided a new technology-based way to go about business. The market has brought about many new buyers and allowed for international trade to happen more smoothly. Even though the market has been on the rise, it has ways to go before it can take that next leap to be a more widely used form of currency.

Should you consider investing in the next crypto that explodes?

It's tempting to try and find that next big cryptocurrency. Even though you could potentially see incredible returns this way, it's also difficult, time-consuming, and extremely risky.

For starters, you'll need to look for cryptocurrencies outside the market leaders. Smaller cryptocurrencies have greater growth potential, but they're also more likely to fold, so there's a bigger chance of losing your entire investment. To balance that out, you might want to put some of your money in cryptocurrency stocks or large-cap coins.

Researching those smaller cryptocurrencies takes time. And, even if a project looks like a sure-fire winner, anything can happen in the crypto market. Your carefully researched investment could go nowhere, while a practically useless cryptocurrency goes to the moon just because it has "Shib" or "Doge" in its name.

Following the cryptocurrency trends or trying to predict them isn't a good investment strategy. There's nothing wrong with giving it a shot, but keep your expectations -- and the amount you invest -- very low.

I have some questions on Crypto currency. Please refer to details below.

I have several questions if anyone could answer I would be thankful.

1. A meme cryptocurrencies on decentralized exchanges like uni swap or pancake swap, when I buy a cryptocurrency where does the money goes to the pool which will increase the liquidity of the crypto token or to the owners?

2. Newest established meme tokens for example, how will they increase their liquidity on decentralized markets, do they cash in the money (investment) to the liquidity pool or when people start buying it will increases by people's investment? If its from people's money in the beginning lets assume, the volatility is too high 70 to 80%, so how do they start improvement?

Last question is, a meme coins like Shiba Inu or safemoon, they now have direct wallet in their website where you can connect your wallet and purchase it from their website, does it mean that every purchase you are making goes to the owner of the cryptocurrency (company) account or to liquidity pool? Their own liquidity pool or decentralized market's pool?

P.S. Many meme tokens are not in platforms like Robinhood, coinbase or binance which makes it difficult to trade unless if they do not have good liquidity in the centralized markets.

Thank you

Are cryptocurrencies reliable assets for Swing Trading?

The top ten cryptocurrencies in terms of market capitalization are

Bitcoin (BTC),

Ethereum (ETH),

Binance Coin (BNB),

Tether (USDT),

Solana (SOL),

Cardano (ADA),

US Dollar Coin (USDC),

XRP (XRP),

Terra (LUNA), and

Polkadot (DOT).

Are these cryptocurrencies deemed as a reliable asset for swing trading? Swing Trading makes trades based on swings in stocks, commodities, and currencies that take place over a few days or several weeks while Day Trading involves using technical analysis and charting systems to make many trades in a single day. Swing traders primarily use technical analysis to look for trading opportunities and may utilize fundamental analysis in addition to analyze price trends and patterns. Swing traders make trades that last a couple days up to several months in order to profit from an anticipated price move. Hence, swing traders are exposed to overnight and weekend risks in that the price can move against them in a dramatic way at the following session.

Swing traders can take profits based on a stop loss and profit target or they can take profits or losses based on a technical indicator or price action movements.

Do you think cryptocurrencies are reliable assets to engage in swing trading?

Some suggestions would be very much appreciated and helpful.

What is cryptocurrency in general?

Cryptocurrencies are a type of digital currency based on blockchain technology that you can’t counterfeit. Bitcoin, the most well-known type of cryptocurrency, was released in 2009 and first started trading on exchange platforms in 2010.

As for blockchain itself? Here’s an analogy that cryptocurrency journalist and podcaster Laura Shin explained to Marketplace: Think of it like a Google spreadsheet.

It’s kind of like those old ledgers, where banks would keep records of its customers’ funds. Except this one is a lot more sophisticated. Shin said blockchain allows us to have just one ledger that everyone can see at any given time.

Shin said she thinks bitcoin is a more transparent form of currency and that over time, the technology underpinning it could enable financial transactions to occur more cheaply.