Why whales Keep Buying Bitcoin and What to Do for an Ordinary Investor
The main cryptocurrency fell by 7% in the last month. Despite this, large holders continue to purchase digital coins. The query in hand is how this factor can affect the quotes, and whether it is necessary to take it into account for all participants in the crypto market.
As a rule, whales mainly enter the market during deep corrections in large quantities and are partially unloaded as the price rises. Active purchases by large investors are quite natural, given the recent correction. In addition, the whales have not yet recorded a profit, except for Tesla.
Large investors do not make emotional and rash decisions and do not invest all their money in cryptocurrencies, since they use digital assets for diversification. Large cryptocurrency holders are simultaneously investing in bitcoin and insuring against falling risks using bitcoin futures on the Chicago Mercantile Exchange by placing short positions. Therefore, whales benefit from any state of affairs and very rarely exit an asset if its value declines.
Investment beginners should be guided in their actions by the whales, since they can often coordinate their deals with a circle of certain people and regularly be informed of events, in order to potentially influence the market by crashing or raising it. Currently, there are no laws on manipulating the crypto market, and assets are very volatile and speculative, so such stories are not uncommon.
A retail investor should consider various factors, and whale activity may be only one of them, and may not necessarily be the most significant. News summaries can also help in making decisions, for example, the fact that some institutions have received the opportunity to invest in cryptocurrency, and technical changes in the blockchain.
One should also not focus on the accumulation of bitcoins by large holders. Retail investors do not have the portfolio and risk management capabilities of the whales, but their actions must be kept in mind in order to roughly understand the long-term prospects of the crypto market.
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