Tracking the wallet movements of Bitcoin whales—those holding a significant amount of BTC—has been popular for speculating on market sentiment.
However, traders argue that it doesn’t lead to “true alpha.”
“Don’t whale watch kids, it’s not useful information,” stated James Check, lead analyst at Glassnode, in a June 15 X post.
He added, “Not once have I seen true alpha extracted from whale watching. It’s good for social media, but is almost never serious nor valuable analysis.”
Crypto traders commonly believe that Bitcoin whales can influence the market with their trading tactics. While whales can impact the market, their movements can be interpreted in various ways, making the data inconclusive.
For instance, if dormant addresses with large holdings suddenly become active, it might indicate selling, especially if they transfer to an exchange deposit address.
Pseudonymous crypto analyst TXMC, host of the YouTube channel Alpha Beta Soup, cautioned against using “whale” metrics to make definitive claims in a June 15 X post.
They noted that large-scale Bitcoin sales by whales don’t always signal a sell-off.
“The mechanical stepwise drawdown here speaks to wallet management, and you are only seeing part of a larger pie.
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“These are sometimes firms & institutions with multiple wallets and hundreds/thousands of clients,” they explained.
Check further elaborated in a May 7 post, “Data around these entities is notoriously noisy, and I can almost guarantee that the big ‘whale’ wallets you’re watching are ETFs and exchanges.”
He described whale-watching as “cheap engagement bait.”
Despite this, social media posts about whale movements attract significant interest.
A recent post by pseudonymous trader Marty Party, discussing Bitcoin whale activity, garnered over 205,000 views.
“Bitcoin OG whales have sold over 50,000 BTC in the past 10 days, totaling approximately $3.30 billion,” Marty Party wrote on June 14.
Analysts often use this data to illustrate differing market views among whales.
For example, Vivek Sen of Bitgrow Lab highlighted a graphic from CryptoQuant showing whales buying $1.3 billion worth of Bitcoin on June 14.
On May 15, CryptoQuant noted that Bitcoin whale demand was in “acceleration mode” after a two-month downtrend, indicating potential stabilization and a need for further demand growth to sustain the price rally.
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