Whales in the world of cryptocurrencies are individuals or entities that hold large amounts of digital currencies, and their impact on the market is often very significant. Their large movements in the market can lead to severe price fluctuations, either up or down, causing a state of instability. These fluctuations can be a major reason behind what is known as "disaster month" or periods that experience a sudden collapse in the value of currencies.
The problem lies in the fact that whales have the ability to directly influence markets due to the size of their investments. For example, if one of them decides to sell a massive amount of the currencies they hold all at once, it could lead to a sharp drop in prices, prompting other traders to sell out of fear of further losses. Conversely, if a whale decides to buy large quantities, it could lead to a sudden price increase.
One of the most important issues in this context is what is known as "Pump and Dump," where whales artificially inflate the price of a currency and then sell their large quantities when the price rises, leaving small investors with significant losses. Sometimes, these movements are so calculated that only large investors benefit from them, while small investors are exposed to high risks.
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