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Whale Wallets 101: How & why are they important?

By July 22, 2022July 25th, 20225 minute read

Whales, the largest creature on earth, have a unique analogization in the crypto world. However, in the crypto space, the term “crypto whale” is somewhat arbitrary and refers to people who own a significant portion of a cryptocurrency’s supply. Small-cap whales, for instance, might only hold $1 million of it, as opposed to $BTC or $ETH whales, who typically control at least a few billion dollars’ worths.

They frequently manipulate markets to accumulate more money while dumping it on “shrimps.” Shrimps are people who hold a lesser market share, primarily small-time investors or traders. So, are we just destined to follow whales’ whims? First, let’s look at who are whales, why tracking whale wallets is essential, and how to track the wallets.

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Who are whales?

According to coincarp, a crypto whale is a person or business that owns a significant quantity of a particular cryptocurrency. A whale with sufficient cryptocurrency holdings has the power to control the value of a coin or token. In general, there is no set amount of tokens or coins that an individual or organization must have to qualify as a whale. If you have 1000 Bitcoin, some people could think you’re a whale. The figure will be larger for altcoins, as it is essentially correlated with market value.

Why Should we track them?

Since the markets are cyclical, bear and bull markets may begin in opposite directions. Retail money typically drives market price increases at their peaks, but investing is best done when the market price is down. Even while all retail investors are responsible for the price movement, crypto whales play a significant role in shaping market trends. We can learn about the trading habits of crypto whales and determine the market stage by tracking their whereabouts. Assuming that whales cut their holdings as prices rise, we can conclude that the market has peaked, especially because retail investors continue to add to their positions simultaneously.

Furthermore, market price movement and market liquidity are always associated. Crypto whales can manipulate the supply of cryptocurrencies to affect the market’s liquidity and cause volatility. The whales’ goal is to drive up the value of their digital assets. Thus, they might sell a lot of tokens to spark a larger market sell-off before purchasing them again at a discount. Additionally, they have the option of releasing a sizable amount of assets to buy cryptocurrency, which will increase the value of their holdings by driving up the price of the cryptocurrency. The cryptocurrency whales significantly impact the market price; therefore, investors want to monitor their activity and profit if the whales’ movement occurs.

What are Whale Wallet Transactions?

There is no shortage of technical indicators and price patterns you can use while trading cryptocurrencies to increase your profits. These popular crypto trading techniques include moving averages, Bollinger bands, bull flags, and support and resistance levels. The issue is that institutional investors frequently predict what everyone else is going to do and take profits in advance when everyone is utilizing the same indicators. Hence, utilizing on-chain analysis is one of the simplest methods to differentiate your research from other investors. And whale wallet tracking is one of the most potent on-chain analyses. But, first, we must comprehend the different types of transactions that can take place to track whale wallets.

These consist of:

  • Exchange to Wallet: Transferring money from a cold wallet to exchange is known as “exchange to the wallet.” In general, currency outflows result in higher prices and vice versa.
  • Wallet to Exchange: Fast investments between a hot wallet and exchange. Depositing assets typically signals sell pressure while depositing stablecoins suggests buying pressure.
  • Wallet to Wallet: Denotes OTC (over-the-counter) transactions, usually for liquidity and privacy. These transactions occasionally occur merely to cause market reactions, but generally, they do not significantly impact the market.

How to Track Whale Wallet Transactions?

1. Tracking Whale Movements

A whale movement is a significant bitcoin exchange. Depending on the direction of the transaction, it’s a straightforward signal that can hugely impact the price of a cryptocurrency. Whale Alert is a Twitter account which had come to become one of the best ways to keep up with whale movement. It notifies followers about large transactions.

2. Market Depth

Market depth reveals how much capital is necessary to raise or lower a coin’s price on a specific cryptocurrency exchange. The depth of the crypto market is measured by how much money is required to raise or lower the cost. On CoinGecko or CoinMarketCap, you can quickly verify a coin’s market depth under the Markets tab. Market depth is crucial when analyzing how a whale movement may affect the price. 

For instance, the price impact could be minimal if you notice a movement of 10 million dollars worth of ETH from a wallet to an exchange with a market depth of 20 or 30 million dollars to the downside. However, most altcoins have millions or even less in market depths. Therefore, a $10 million whale movement would significantly impact the pricing in other altcoins.

3. Using Blockchain Explorers

On blockchain explorers like Etherscan, if you notice that a cryptocurrency is being transmitted from a regular wallet to an exchange wallet, it is likely that the sender wishes to sell the cryptocurrency. 

When the transaction is small, this is not a huge concern. However, the price could drop if you witness the transfer of hundreds of millions of dollars worth of a cryptocurrency from a wallet to an exchange. On the other hand, if you notice that a wallet is receiving hundreds of millions of dollars worth of bitcoin from an exchange, that wallet’s owner likely plans to HODL.

Etherscan is one of the most dependable and well-known block explorers for Ethereum. Here’s a guide to using Etherscan


Whales ultimately desire a rise in the value of their currency. However, most of the time, others suffer, as a result, falling prey to their market-moving waves. One effective strategy to stop this is to monitor their wallets and comprehend their motivations.

Tracking cryptocurrency whales might help you better comprehend market trends and patterns. Investors shouldn’t, however, just rely on these techniques and make snap judgments based on the whales. Tracking whales may provide some advantages, but it is not the most reliable information because the cryptocurrency market is unregulated and hence more easily manipulated than traditional financial markets. Therefore, before making trading judgments, you should DYOR!

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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