Last week, CryptoQuant explained that there was no clear movement from whales. Additionally, there were some signs of miners liquidating their positions, but nothing definitive that could indicate a downturn. This environment has continued into this week, with institutional investors entering the space becoming a common theme. With these considerations, specifically, that miners aren’t liquidating their positions, it appears likely that price will continue to rise.
Experienced fishermen watch and listen to the waves of the ocean, that although similar in the way they ebb and flow, can indicate what is occurring far off in the ocean. Market whales' movements that are recorded on-chain are the same. More than simply if whales on exchanges are increasing or decreasing, when and how the price is moving are all contextual factors that need to be analyzed.
Cryptocurrency market whales. Each has their own interest.
Whale deposits into exchanges can be divided into two types. Deposits occurring after large drops in price, as well as deposits taking place while price is rising. Typically, when price is consolidating or rising, an increase in whale deposits to exchanges indicates that there is a high possibility of further downside.
Our indicator illustrates this is the ‘Exchange Whale Ratio.’ It is calculated by dividing the value of largest 10 deposits into exchanges by the total value of deposits into the exchange. When this is lower then 85%, the chances of price continuing to rise is high. Between 85% and 90% indicates a correction, and above 90% indicates that a large drop in price can occur.
During the 2020 bull market, the ‘Exchange Whale Ratio’ has largely remained below 85%.
In March of 2020, the ‘Exchange Whale Ratio’ reached above 90%.
In the 2019 bull market, the ‘Exchange Whale Ratio’ remained below 85%.
In the 2018 large drop in the market, the ‘Exchange Whale Ratio’ reached 90% and remained between 85% and 90%.