Who are the whales and what do they do? Do you want to know?
In the trading world, especially in cryptocurrencies and low liquidity markets, the term "whales" refers to large investors who hold massive amounts of assets.
So, do whales monitor the movements of small traders? The answer:
Not literally... but yes, partially!
How?
Whales do not monitor individuals specifically, but they:
Monitor liquidity levels and buy/sell orders to identify market weaknesses.
Use data analysis tools to detect "accumulation" or "panic" in the behavior of small traders.
Sometimes they make large moves (such as pumping prices and then dumping them) to deceive novice traders (which is called "Pump and Dump").
Examples:
- Whales manipulating small coins (Shitcoins).
- Pressuring prices to break stop-loss levels of small speculators.