In Herman Melville’s classic novel, “Moby Dick,” Captain Ahab obsessed over that great white whale. In the finance sector, cryptocurrency is like an ocean where different kinds of “whales” have garnered the attention of small investors. These institutional holders of ETH can trigger upward and downward movements in the Ethereum price. As an investor, it makes sense to know who the whales are, how they impact Ethereum’s value, and how you can respond.

Crypto Whales 101

In simple terms, whales are holders of large amounts of ETH. These investors include individuals, exchanges, and institutions. The two largest individual holders are believed to be Rain Lohmus, who is estimated to have 250,000 ETH, and Ethereum co-founder Vitalik Buterin, who reportedly holds roughly 245,800 ETH. The top 104 whales have at least 100,000 ETH each, accounting for an estimated 57% of the total ETH supply.   

Why Whales Matter

Whales engage in two activities that can disrupt Ethereum’s market: a large-scale dump and a vast accumulation. These movements can positively or negatively impact the coin’s value.

Dumps occur when large ETH transfers to exchanges before sell-offs. A sizable liquidation can boost short-term selling pressure. Reportedly, this event may have happened recently when 2015 ICO unloaded 3,000 ETH for $5.39 million. Substantial liquidations often cause the Ethereum price to drop.

Meanwhile, large-scale accumulation can lead to a price increase. This whale movement occurs when they withdraw large amounts of ETH to cold wallets and staking platforms. This transaction type appears to have taken place recently, when whales acquired over $50 million in ETH. Huge purchases like this could signal a bull run and positive market sentiment.

Investors and traders can’t ignore whale dumps and accumulation — crypto whales can shake up the price charts. Having insight into these actions is helpful, especially when gauging market trends.

Whale Activity with the Biggest Price Impact

Some small investors may wonder which whale movements have the most significant impact on the Ethereum price. Dumps or accumulation? While both have an undeniable influence, the former packs the biggest punch due to its immediate effect.

A sudden, high-volume sell-off puts pressure on the market, causing investors to panic and resulting in a drastic price decline. That appears to be what happened with the liquidation of 3,000 ETH during the 2015 ICO.

On the other hand, a gradual accumulation has a long-term effect. Large-scale buys may indicate ongoing confidence in the market. In this scenario, you’re likely to see a buildup of slow momentum that might lead to a lengthy bull run.

Massive accumulations, such as the $50 million purchase, can create a fertile environment for future rallies. Additionally, they might help stabilize the Ethereum price. Unlike dumps, you’re may not be as likely to witness breakneck price declines.

Lessons for Small Investors

Whales can set off the herd mentality. In other words, many small investors will sell when the large holders sell and buy when they buy. Often, moves like this happen due to panic or FOMO (fear of missing out).

It’s not unusual for non-institutional investors to monitor whales. However, many also use on-chain analysis to understand the market’s direction. This approach enables them to make data-driven decisions rather than emotion-based trades.

Keep an Eye on the Whales

Whales are major players within the cryptocurrency space. With their substantial Ethereum (ETH) holdings, they are in a position to cause significant market upheaval. Massive dumps can trigger a rapid drop in the coin’s price, while vast accumulations can result in a price spike.

These large-scale investors can either stabilize the Ethereum market or pull the rug from under it. As a result, small investors should monitor the whales as part of an overall investment strategy. By doing so, they can make more informed trading decisions.

This content is for educational purposes only and is not to be used as investment advice. Investing involves risk, and your investment may lose value. Past performance gives no indication of future results. These statements do not constitute and cannot replace investment advice. The views, thoughts and opinions expressed in this contributor content belong solely to the contributor and do not represent the views of Lee Enterprises.

Lee Enterprises newsroom and editorial were not involved in the creation of this content.