The cryptocurrency market is influenced by the actions of “whales,” who are large investors or entities that hold significant amounts of digital assets. A metric that tracks their movements is the Whale Ratio, which is calculated by dividing the total inflow of the market’s largest 10 transactions by the total inflow of all transactions.
According to CryptoQuant, a data analytics platform for cryptocurrencies, the Whale Ratio is a critical indicator of the market sentiment and direction. A high Whale Ratio means that there are more large transactions than usual, which could signal a change in the price trend.
The Whale Ratio typically stays below 85% during bull markets, when prices are rising, and above 85% during bear markets, when prices are falling. This suggests that whales tend to buy low and sell high, taking advantage of the market fluctuations.
However, the Whale Ratio is not a simple predictor of the price movement, as it can vary depending on the support and resistance levels of the price. For example, if the price is falling and reaches a support level, where buyers are expected to enter the market, a high Whale Ratio could indicate that whales are also buying and pushing the price up. On the other hand, if the price is rising and reaches a resistance level, where sellers are expected to exit the market, a high Whale Ratio could indicate that whales are also selling and pulling the price down.
Currently, the Whale Ratio is at 93%, which is above the bear market threshold. This means that there is a lot of whale activity in the market, especially on platforms like Coinbase, where large transactions are more common. This could have a significant impact on the price trend, depending on how the whales react to the market conditions.
CryptoQuant advises investors to pay attention to the Whale Ratio and other indicators, such as the exchange inflow and outflow, to get a better understanding of the market dynamics and the behavior of the whales.
Source: https://azcoinnews.com/crypto-whales-are-making-waves-in-the-market-according-to-cryptoquant.html