Whales are mammals that live in the ocean, or at entertainment parks! Just kidding... whales has become a term associated with market manipulators. Market manipulators will come into a market, buy a majority of the available positions or limit orders and drive up the price. Once the price has reached their target price, they will attempt to liquidate their position, albeit a large position which may take some time. Generally, this will cause the price to crash back down to it's inherently acceptable level.
This is different however from good market news coming out, or similar sources of price drivers. I like to think of a stock price in two different forms - the inherent value, and the market determined price. In an efficient market, prices will tend to move towards the inherent value. Good news for the company and complementary products will drive the inherent value up, and the stock price will adjust to reflect this. The market determined price is how over or undervalued a stock is compared to the inherent value.
When a whale enters a position, the price tends to follow a similar pattern. Demand for the stock will rise rapidly as positions are being bought. Price will skyrocket and other investors will notice, jumping on board. After a few minutes or hours, the amount of new investors will slow down creating a plateau or hump in the price. Investors lose confidence and begin to pull their position out of fear that a crash in the price is coming, ultimately causing said crash themselves.
A few weeks ago this happened with the omnicoin. In a single day, omnicoin rose nearly 400% in price. Just as quickly as it rose however, it came crashing back down. I was watching the price fluctuate hundreds of percentage points in minutes. Up to 350%, down to 280%, up to 370%, down to 260% gains. This was a perfect example of the market not knowing what it should be priced at, but whales and hype driving the price up and down.
Your goal as an investor is to recognize these patterns and profit from them. If you can time the entry of whales, you stand to make a good amount of money. If you can also recognize when the momentum is slowing and there are not as many new investors hopping on the band wagon, you can protect your gains. A lot of stock trading comes down to understanding human psychology.
**
As always, this post is not investment advice and should not be used in any investment decisions. I am not a licensed adviser, but rather am providing my own views on the above material for discussion purposes. You should never base your investments off someone else, and instead should do your own research.
I hope that you found this post interesting. If you have any questions, please comment below. My goal with this profile is to make frequent posts about finance, cryptocurrencies, investment, and wealth generation. I plan to not only make posts, but also youtube videos, and give away free excel workbooks to assist you in your personal finance goals. If this interests you, please let me know and follow my profile. Additionally, if you would like to reach out and ask any questions/request that I make a post on a topic, please reach out to me at [emailprotected].
**
FAQs
The concept of a "whale" comes from traditional financial markets, where it refers to investors whose large holdings can impact market movements, including notable market shifts due to the sheer volume of their trades.
What is the whale investing strategy? ›
Keep an eye on the whales. The world's biggest asset owners tend to have influence beyond their size. They enjoy more market power, enabling them to drive better deals; they can put up with liquidity far better than most; and they have a long time-scale. Very influential, others tend to follow them.
What is whale alert stock? ›
This whale alert can help traders discover the next big trading opportunities. Whales are entities with large sums of money and we track their transactions here at Benzinga on our options activity scanner. Traders often look for circ*mstances when the market estimation of an option diverges away from its normal worth.
What is a whale wealthy? ›
About WHALE WEALTH
WHALE WEALTH is an asset management firm, providing services for institutions and high net worth individuals.
How many Bitcoin to become a whale? ›
Bitcoin whales are people or organizations that own significant amounts of BTC and can typically influence price movements with a single trade. An individual or group holding a minimum of 1,000 BTC in their wallet is considered a whale.
What whale means money? ›
A Whale is a currency trader or large investor with sizeable holdings of a particular cryptocurrency, who often also has a significant amount of capital invested in the cryptocurrency market as a whole and elsewhere.
How do you spot whales trading? ›
You can identify potential whale activity by looking out for unusual patterns. You can also look for large transactions using blockchain explorers such as Etherscan or Blockchain.com. When you see a large amount of cryptocurrency being moved, it could be a sign that a whale is active.
Did the whale make a profit? ›
The Whale premiered at the 79th Venice International Film Festival on September 4, 2022. It had a limited theatrical release in the US on December 9, before a wide release on December 21 by A24, grossing $57.6 million against a budget of $3 million.
Do whales control the market? ›
Their vast holdings have been accumulated through mining, early investments and other methods. Whales have access to substantial Bitcoin holdings, which gives them the power to manipulate the market by making significant asset purchases or sales that result in price fluctuations.
How to see what whales are buying? ›
You can track the wallets of crypto whales by using tools such as Whale Alert, DexCheck, DeBank, and Cryptocurrency Alerting. After you find an address that's potentially interesting, you can track its activity in detail using a blockchain explorer such as Etherscan.
whales has become a term associated with market manipulators. Market manipulators will come into a market, buy a majority of the available positions or limit orders and drive up the price.
Is Whale Alert free? ›
With the free Whale Alert app, mariners and members of the public are provided with a user-friendly tool directly on their smartphone or tablet (Apple or Android).
What is considered a whale in stocks? ›
For decades, investors have been monitoring the actions of large and/or influential investors (commonly referred to as "whales") who can have the ability to move markets simply by their buying and selling activity. Warren Buffett, for example, has been one of the most watched investors for most of his career.
Why are big spenders called whales? ›
The term “whale” actually comes from the casino industry. Casinos use it to describe their highest-spending gamblers – the ones who might drop millions at the tables. The gaming industry borrowed this term as free-to-play games with microtransactions became more popular.
Are whales worth money? ›
After accounting for the economic benefits whales provide to industries such as ecotourism—and how much carbon they remove from the atmosphere by "sinking" it in their carbon-dense bodies—the researchers estimate that one great whale is worth about $2 million over the course of its life, they report in the trade ...
What is a whale in buying? ›
Whale buyers, or simply whales, describe entities in financial markets with significant purchasing power. Originating from the world of high-stakes gambling, the term “whale” is used to describe big spenders, analogous to the large size of whales in the sea.
What are sharks and whales in stock market? ›
Whale orders can alter the direction of the stock and have an impact on market fluctuations and also. Hedge funds are often connected with whale orders. Sharks are investors who entice consumers to invest in obscure securities that offer large returns.
What is a whale in business? ›
Whales are giant, awe-inspiring creatures that roam the oceans. They're also extra-large clients that you can count on for steady, high-paying work. In business lingo, a whale is a prospect that's at least 10 times larger than the average client or customer.
