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What are crypto whale trackers and how do they work?

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What are crypto whale trackers and how do they work?

Most cryptocurrencies have a number of large holders of the asset who can influence the price of the crypto asset. For active investors and crypto traders, it helps to understand the market behaviors of these whales.

Crypto whales refer to large holders of cryptocurrencies. They can be individuals or organizations who often own more than 10% of crypto. For instance, MicroStrategy owns nearly 130,000 Bitcoin (BTC) and can move the price of BTC by their market participation. Therefore, tracking the action of crypto whales provides timely insights into the price movement of a crypto asset.

This is not just a crypto phenomenon. In traditional markets, when a big player like Warren Buffett, a brand or a hedge fund reveals that they have taken a position in a particular asset, the price of the asset rallies or vice-versa. That said, when these players sell an asset, the market typically follows.

With cryptocurrencies and nonfungible tokens (NFTs), all transactions are on-chain. Thanks to the transparency that blockchain offers, transactions performed by wallets held by whales can be spotted by the size of the crypto positions they hold. These wallets can be tracked to then understand how the wider market could behave.

There are dedicated solutions to track the actions of crypto whales. These solutions can provide analytics on whale actions and, in some instances, can also make investment/trading decisions for the user.

Crypto traders and investors constantly track the amount of cryptocurrencies going in and out of exchanges. When a cryptocurrency like Bitcoin or Ether (ETH) is moved in large quantities into an exchange, it is expected to see some sell action resulting in a fall in price. Conversely, if cryptocurrencies flow out of exchanges into wallets, it is considered a precursor to a rise in price.

This is because when exchanges have a high net outflow of cryptocurrencies, they have reduced supply resulting in an increase in price. Oftentimes, a whale could buy cryptocurrencies on an exchange and move them into their wallets in large volumes. This could result in a bullish price action for the crypto.

In some scenarios, whales may choose not to disturb the markets by buying or selling on an exchange. They would do an over the counter (OTC) transaction between two wallets. For instance, they may send Bitcoin to a wallet that will send USD Coin (USDC) back, resulting in a sale of BTC without the market spotting the transaction.

When the blockchain records a large transaction, investors can study the transaction and pick up the wallets involved in it. If the wallets hold large cryptocurrency positions, they can be labeled as crypto whale wallets. From then on, a regular check on these wallets and the transactions that are conducted can be insightful in assessing price movements of the crypto held in the wallet. 

Whale tracking can be equally beneficial in the NFT markets too. Most NFT communities have large holders of the collection. In many instances, these NFT holders are identified by the community. Tracking the behavior of wallets of these whales can help investors make quick buy/sell decisions.

For instance, if a famous NFT collector or a whale sweeps the floor of a nonfungible token collection, that can indicate high convictions. Followers of the NFT collection and the whale would notice that and purchase the nonfungible tokens. This behavior was noticed with Gary Vaynerchuk several times during the NFT bull market in 2021.

However, it can be overwhelming and time–consuming to manually stay on top of whale action, even when it is just for one cryptocurrency or NFT collection. This is where whale tracking tools come into play.

Thanks to whale tracking tools, investors are able to identify wallets that whales own and track them for buy and sell action due to the transparency that blockchain offers. Using tracking tools helps with the automation of the tracking process. 

Most crypto investors own more than one cryptocurrency in their portfolio. In order to be informed of market movements, they will need to identify and track several wallets that hold large volumes of the cryptocurrencies they are interested in. On-chain analytics tools offer this functionality. 

Tracking tools scan through a blockchain, and when a transaction gets committed by a whale wallet, spot them in real time and notify the user. These tools can also help identify transactions that are over a specific size, thereby allowing users to conduct discovery of the whales within that crypto ecosystem.

On a similar note, NFT collections can be tracked for actions like the listing of new nonfungible tokens below floor price, sale of NFTs at bid price, floor sweeps and others. The floor price of a nonfungible token collection is the minimum price at which an NFT can be bought. Occasionally, when the market appetite for an NFT collection is poor, the floor price comes down.

The fall in floor prices often begins with one holder of the NFT listing it below the floor price. Therefore, whale tracking tools can be used to spot such behaviors so that an investor is made aware and act accordingly. 

Floor sweep, on the other hand, indicates high demand for an NFT collection. This refers to the action when someone buys many nonfungible tokens in a collection that are listed at the floor price. Whale tracking tools can spot when a whale’s wallet sweeps the floors of a new collection. This will alert NFT investors, who can then start tracking the new collection.

Whale tracking tools like Whale Watchers, Whale Bot Alerts and others can help investors spot whale action and make quick and timely decisions.

Whale tracking tools come with different capabilities, some can be just a simple window on top of a blockchain, while others have analytics and charting capabilities across multiple blockchains. Some only cover crypto whale tracking, while others offer NFT whale tracking too. 

Various analytics tools offer just simple analytics and notifications on whale activities, while others provide users with more comprehensive learning opportunities on charts and analytics. Some just do a simple feed, while others tap into channels like Twitter and Telegram to keep users informed.

Some of the key tools for whale watching are Whale Watchers, Whale Bot Alerts, Whale map, Whale alerts, Clank App and Coincarp. Apart from these, tools like Etherscan and Solscan sit on top of their respective blockchains to offer whale-tracking functionalities.

One can get as technically savvy as possible with whale tracking. Yet, market reaction to a whale transaction is not entirely predictable. It is useful to have information around whale behavior, yet, that is just one input that will affect the price action of cryptocurrencies. That is especially true in a market largely driven by macro-economic factors.

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Bitcoin (BTC) Price Slips as US Labor Market Figures Hotter Than Expected

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Bitcoin (BTC) Price Slips as US Labor Market Figures Hotter Than Expected

Bitcoin fell 2% to around $16,800 after the Nov. 2022 U.S. jobs report revealed a strong labor market, despite the Federal Reserve’s six consecutive interest rate hikes in 2022.

Nonfarm payrolls increased by 263,000, beating the Dow Jones estimate of 200,000, while the unemployment rate matched expectations at 3.7%.

Jobs Report Signals Fed Hikes Are Likely to Persist

The gain in nonfarm payrolls came in slightly lower than the revised Oct. 2022 increase of 284,000, while average hourly earnings rose 0.6% compared to estimates of 0.3%.

The U.S. Bureau of Labor Statistics releases the nonfarm payroll and average hourly earnings at 8:30 E.T. on the first Friday of every month as part of the Employment Situation report.

While rising employment rates and wages generally point to a healthy economy, wages that grow too fast, especially in the presence of record levels of inflation, encourage the Fed to continue raising interest rates to ensure that the economy doesn’t run red-hot. 

“To have 263,000 jobs added even after policy rates have been raised by some [375] basis points is no joke,” noted Seema Shah of Principal Asset Management. “The labor market is hot, hot, hot, heaping pressure on the Fed to continue raising policy rates.”

Raising policy or interest rates cools economic expansion, but if done too aggressively, it could significantly curtail employment and pitch the economy into a recession. Recession fears generally create selling pressure on risky assets like cryptos and equities, driving prices into bear territory.

Cryptos ceded gains accrued earlier this week around a lower-than-expected Personal Consumption Expenditure Price Index of 0.2% for Nov. 2022. 

At press time, XRP was down about 2.5%, while DOGE fell 3.78%. Solana also declined by 1.1%. Equities markets also tanked, with the Dow Jones Industrial Average falling 0.9%, the S&P 500 1.2%, and the tech-heavy Nasdaq slid 1.5%. 

Crypto price heatmap
Source: Coin360

Elsewhere, gold is outshining Bitcoin as an inflation hedge and trading back at its price at the beginning of the year, $1,800 per ounce. By comparison, Bitcoin has fallen 63% in the same period.

Jobs Report and Inflation Still Likely to Influence Crypto Prices

The higher-than-expected Nov. 2022 nonfarm payroll number is the lowest jobs gain since April 2021, coming after a revised increase of 284,000 new jobs in Oct. 2022.

Nonfarm payroll increases in 2022
Source: TradingEconomics

The most significant adjusted increases in the nonfarm payroll were noted in the Feb. 2022 and July 2022 jobs report. The Feb. 2022 report revealed that nonfarm payrolls increased by 714,000 in Jan. 2022, prompting the Fed to step in with a 25 basis-point hike in March. 

The following four reports pointed to a cooling down of the labor market, which then picked up again in June 2022, when the Fed introduced its first 75 basis point hike of 2022.

On Nov. 30, Fed chair Jerome Powell noted that less aggressive rate hikes might be a distinct possibility at the next Fed meeting, although most analysts do not expect a drastic fall off from the last four increases of 0.75%. 

They predict that the Fed will increase interest rates by 50 basis points at the next Federal Open Markets Committee meeting in mid-Dec. 2022, taking the federal funds rate above the 4% mark. 

The Fed meeting will likely spark a rally in both cryptos and stocks if analysts’ estimates prove accurate.

For Be[In] Crypto’s latest Bitcoin (BTC) analysis, click here.

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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EU Parliament to ‘Vote on Adopting the Regulation on MiCA’ — Expert Says Industry Needs Legal Clarity

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EU Parliament to ‘Vote on Adopting the Regulation on MiCA’ — Expert Says Industry Needs Legal Clarity

In a recent statement, the European Parliament said its members would shortly “vote on adopting the regulation on markets in crypto-assets (MiCA).” According to the parliamentary body’s think tank, the envisaged regulations are expected to provide “legal certainty for crypto-assets not covered by existing EU legislation.” A crypto counselor, Paulius Vaitkevicius, said any regulation of crypto is likely to result in more capital and talent coming into the space.

‘Harmonized Rules’ for Crypto-Assets at EU Level

After months of discussions and negotiations which culminated in the June 30 preliminary agreement, the European Parliament (EP) is now set to “vote on adopting the regulation on markets in crypto-assets (MiCA).” The vote is set to take place during the legislative body’s plenary session. European leaders assert that the adoption of MiCA will lead to the creation of “harmonized rules for crypto-assets at [the] E.U. level.”

According to a Nov. 29 briefing by the parliament’s think tank, the harmonized crypto rules are expected to provide “legal certainty for crypto-assets not covered by existing EU legislation.” In the briefing, the EP also argues that the rules will not only enhance the protection of consumers and investors but will also “promote innovation and use of crypto-assets.”

Through MICA, European authorities also hope “to regulate [the] issuance and trading of crypto-assets as well as the management of the underlying assets.”

While European leaders like European Central Bank president Christine Largade are pushing for tougher regulation — MiCA II — some critics of the proposed legislation argue that the envisaged regulations in their current form may stifle innovation.

Legal Clarity Attracts Mature Players

Commenting on the European Union’s drive to regulate cryptocurrencies, Paulius Vaitkevicius, founder and crypto counselor at the law firm VILP Solutions, said the prevailing “Wild West environment” is not helpful to all parties. He also told Bitcoin.com News that without guidelines or regulatory frameworks “and with a number of situations where industry players collapse, we might end up in a situation where we will have only a handful of investors left in the industry.”

EU Parliament to 'Vote on Adopting the Regulation on MiCA' — Expert Says Industry Needs Legal Clarity

Therefore, to stop this from happening the crypto industry needs legal clarity, which according to Vaitkevicius, “bring[s] in more mature players to the industry from both project and investor sides.” Explaining why he is in favor of regulating the industry, Vaitkevicius said:

From my personal experience, such players have been seeking regulations and clarity already for some time and waiting for the right moment to step in properly. With regulations, we will see these firm steps and as a result additional capital and talent coming to the industry space.

Meanwhile, some crypto opponents have said if appropriate regulatory frameworks were already in place, Sam Bankman-Fried’s shenanigans would have been exposed much earlier. However, when asked about the validity of this argument, Vaitkevicius said the opinion that on paper FTX itself was “one of the most regulated players in the industry” undermines this theory. He added:

“Regulation is a good step forward, but [this] needs to be followed by other elements to be functional in real-life situations and achieve the pursued goals.”

What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets

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Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets

Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets

The authority responsible for crypto oversight in Uzbekistan has determined the order of issuing and circulating digital assets in the country. The main reason behind the move is to establish a mechanism that would allow local companies to attract capital through coins and tokens.

Uzbekistan Government Sets Out to Regulate Digital Asset Investments

The National Agency of Perspective Projects (NAPP), under the President of Uzbekistan, has released a new regulation on the procedures for the issue, registration, and release in circulation of crypto assets in the Central Asian Nation.

The document provides basic legal definitions for crypto assets and makes distinction between the different types. It introduces requirements for crypto issuers, depositaries and custodians and determines their obligations, including those concerning relations with customers.

The authority has also approved rules for the establishment and maintaining of an electronic register of crypto assets and adopted accounting standards for the rights associated with them and those of their holders.

Crypto depositories will be responsible for providing services for the issuance, registration, circulation, and storage of crypto assets. Issuers can use them or other electronic platforms, the NAPP said, pointing out that the nominal value of the coins must be expressed only in the national fiat, the Uzbekistani som.

The agency emphasized that the issuance of unsecured tokens is prohibited. Using words such as “state,” “state-secured,” “state-supported,” “Uzbekistan,” “Uzbek,” “national,” and “som” in the names of the cryptos is banned. The regulator also clarified:

The main purpose of the adoption of this document is to create a new mechanism for business entities to attract investments and develop their activities by issuing and registering the issue of secured tokens.

The NAPP further warned against any unauthorized activities related to the circulation of crypto assets in the country or the use of services by providers that have not obtained a license to offer them. The same applies to firms involved in the mining of cryptocurrency.

Uzbekistan has been taking steps towards the comprehensive regulation of its crypto sector with several decrees signed by President Shavkat Mirziyoyev and resolutions by the National Agency of Perspective Projects. The country recently licensed two companies to provide exchange services.

Do you think Uzbekistanis will benefit from the new regulations adopted by the country’s crypto watchdog? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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