The Whale Effect: Decoding Exchange Ratios and Their Impact on Crypto
The post The Whale Effect: Decoding Exchange Ratios and Their Impact on Crypto appeared first on Coinpedia Fintech News
The crypto market is still in choppy hands, and there is no relief despite the Fed’s decision to keep the rates the same. Though there is short-term uncertainty, experts are generally optimistic about the long-term growth of the cryptocurrency market. However, news of increased exchange whale activities is disrupting crypto prices.
As per CryptoQuant, the Exchange Whale Ratio data shed some light on the activity of large traders, or “whales,” on cryptocurrency exchanges, particularly concerning the Top 10 Inflow compared to the total influx over 72 hours. When this ratio approaches 100%, it indicates that whales play a significant role in driving price movements, potentially leading to increased volatility.
Altcoin’s In Crypto Whale Action
This disrupting whale activity is causing turmoil in the crypto space. Whales add liquidity to the market with huge purchases, which allows panic sellers to trade without lowering prices. However, this metric across various cryptocurrencies reveals interesting patterns.
For example, Bitcoin exhibits a high whale dominance, with 96% of the influx attributed to the Top 10 addresses. In contrast, Ethereum shows a much lower ratio at 11.45%, suggesting a more balanced influx of funds.
Certain altcoins, such as NMR, ENJ, YFI, and CHZ, display similar whale dominance to Bitcoin, indicating significant activity from large investors. On the other hand, altcoins like AAVE, SHIB, and MATIC demonstrate a more equitable distribution of funds between whales and smaller investors.
The lower influx of funds from whales in some altcoins could be attributed to factors such as decentralized trading mechanisms, particularly prevalent in second-layer solutions like Ethereum. Additionally, Ethereum’s role as a Smart Contracts platform expands its trading ecosystem beyond centralized exchanges, potentially reducing whale activity on these platforms.
Advice for Investors
Continuous monitoring of the Exchange Whale Ratio by Crypto can help investors gauge potential price volatility in the market. By understanding the influence of whales on exchange activity, investors can make more informed decisions regarding their cryptocurrency holdings.
