How To Track Crypto Whales
As we’ve explored in previous content, crypto wallets are digital tools that store, send, receive, and manage your digital assets, such as NFTs and cryptocurrencies.
They are, by design, transparent, which means they are trackable, an important point to consider for this article.
Throughout this guide, we’ll explore “crypto whales”, who they are, why they’re important, and how tracking their wallets and activity can give you extraordinary and actionable market insights.
Let’s begin.
What Are Crypto Whales?
Any individual, business, or entity that holds a substantial amount of cryptocurrency (enough to influence market prices when trading), can be deemed a “crypto whale”. They’re the heavyweight investors of the blockchain world, and they may hold millions, or even billions of dollars worth of crypto assets.
Should they decide to make a huge trade with their vast holdings, there will be an almighty splash, sending waves throughout the market. This is how they earned the term “whales”.
Crypto whales, love them or hate them, play a unique and critical role in market dynamics, for example:
They provide substantial liquidity to crypto markets
They influence price movements and can be the catalyst for both positive and negative performance
They are responsible for market sentiment shifts via their trading patterns
They can disrupt market stability, whether accumulating or distributing
For all the above reasons, and more, tracking whales’ wallets, particularly looking at tokens you are holding, is an insightful activity that can inform your trading strategy.
Note: Crypto whales are unpopular with some blockchain purists, who believe that holding too much of a token is a step back towards centralization, which is what decentralized technology naturally opposes.
Some believe that whales are just rich guys looking to manipulate the markets for a profit – something that goes against the industry’s ethos.
What Is Crypto Whale Tracking?
This is nothing like tracking a whale in the ocean.
Crypto whale tracking is the practice (or some may say art) of monitoring huge crypto holders’ activities and wallet movements, often referred to as “on-chain analysis”.
Blockchain transparency makes this possible, with the detailed surveillance and thorough investigative work helping traders and investors to decode potential market directions by studying how these influential players move.
Let’s run a historical example, using Nansen. Three years ago, billionaire hedge fund investor Bill Ackman revealed on Twitter that he invested in $DIMO. We don’t know how much exactly, but we do know from news sources at the time that the funding round was $9m.
Based on the launch price of the token and historical price data, again, all transparent, we can assume that $9m worth of $DIMO holdings would be around 260m coins.
18 investors shared those 250m, but to which percentage, we don’t know. Shared equally, it would be around 14m tokens each.
Using Nansen, we can look at $DIMO, which is on the Polygon network, and assess the largest wallet balances (as shown below).
The third wallet on the list aligns with our maths. We also know that Bill Ackman only holds $DIMO and $HNT (based on his own admission), so now we can begin to look at wallet holdings to identify a wallet with those two tokens to try and, to the best to our abilities, find Ackman’s wallet.
Of course, this is just an example (he may well have sold by now), but it paints a picture of what is possible.
In short, there’s predictive potential in looking at big wallets. When whales move, they almost always precede market shifts.
The even harder part, of course, is predicting when the whale will move, or trying to make sense of their behavior at all. Crack a whale’s code and you can unlock:
Market sentiment shifts
Accumulation or distribution patterns
Potential price movements
If the wallet you’re tracking belongs to an institutional investor (as opposed to a single retail investor), you may even be able to identify institutional investment trends, which can dramatically impact not only your strategy, but how large swathes of the market may pivot.
How Does Crypto Whale Tracking Work?
Ok, let’s get to the nitty gritty.
First, we recommend you read our previous article about wallet tracking in general, it’ll give you critical foundational knowledge to proceed.
Pay particular attention to the “smart money strategy” section.
Next, we begin our on-chain analysis, remembering the key fact that the blockchain is transparent and that all transactions are both recorded and immutable.
Following that, crypto whale tracking works by looking at publicly available blockchain data to identify significant cryptocurrency movements, locate major wallet addresses, or study large digital asset holdings (as well as other activities that we will explore).
Once you’ve found a wallet, you’ll be able to use a blockchain explorer to look at:
Wallet Balances: Monitor changes in large wallet holdings
Transaction Volumes: Track the size and frequency of whale transactions
Exchange Flows: Analyze movements between private wallets and exchanges
Token Distribution: Understand how whales spread their holdings
Whale tracking is not a perfect system, it’s more of an early warning system for potential market movements.
Like an earthquake or tsunami detector can identify all the signs of something big happening, so can efficient wallet tracking, giving the tracker a high-level understanding of market sentiment.
This can either be used to reduce risk or, much more likely, to capitalize financially by making adjustments to a trading strategy.
How To Track Whales’ Movements In Crypto
In general, there are three common crypto whale tracking methods.
Monitoring Exchange Wallets
Many whales use large, centralized exchanges, like Binance, Kraken, or Coinbase, to make huge deposits and withdrawals.
Some whale trackers study individual wallet addresses and are alerted by huge movements, which typically signal incoming trading activity.
Tracking DeFi Protocol Activity
Another way to spot crypto whales is to monitor significant liquidity movements on major decentralized finance (DeFi) protocols, like Aave, EigenLayer, and Compound.
Learning how to track whales using this method has a slightly higher learning curve, but can yield more useful data.
Trackers should pay close attention to:
Large liquidity provisions
Major borrowing activities
Significant staking movements
Analyzing Token Movements
The third method is to look at a specific cryptocurrency, often referred to as a “token” or “coin”.
By looking at the right blockchain explorers, you can see every single transaction made on every single blockchain (except for certain privacy networks or mixers).
Whale trackers will watch for patterns relating to:
Token accumulation phases
Distribution periods
Cross-chain transfers
Cold storage transfers
Additional Tracking Methods
While we’ve covered the three traditional methods for how to track crypto whales, there are new methods popping up every year, and this year may even see new AI whale trackers pull and organize information in unforeseen ways.
Aside from the techniques already outlined, if you’re trying to think outside the box to get a competitive edge, you may also want to explore:
Monitoring governance voting power changes in DAOs
Tracking whale wallet interactions with new projects
Observing stablecoin movements between protocols
Recommended Crypto Whale Tracking Tools
BONKbot recommends the following crypto whale tracking tools, which automate much of the process and make your efforts far easier and more efficient. Manual while tracking can be tiresome and complicated, so feel free to research these services:
Whale Alert
Offers:
Real-time tracking of large cryptocurrency transactions
Comprehensive coverage across multiple blockchains
Social media alerts for significant movements
Nansen
Provides:
Advanced analytics platform with whale wallet labeling
Detailed DeFi protocol tracking
Smart money flow analysis
Arkham Intelligence
Delivers:
Sophisticated entity clustering
Historical whale behavior analysis
Cross-chain movement tracking
Additional Notable Tools
Just for good measure, here are some other whale tracking tools that can be of service:
Santiment: For social metrics and whale behavior correlation
Glassnode: For on-chain whale activity metrics
DefiLlama: For DeFi protocol whale movements
Final Thoughts on Crypto Whale Tracking
Making informed decisions when trading crypto is crucial to your success. Understanding and tracking crypto whale movements is a solid way to capture valuable market insights and information.
Therefore, you’d think that tracking whales will lead to success. It might, or it might not, because, and this is the ultimate point: it isn’t a guaranteed predictor of market movements.
While BONKbot doesn’t track whales, it is arguably the best Telegram trading bot, designed to cater to professional traders and total novices.
It works within Telegram, for a seamless and integrated experience that automates (and negates) much of the complication of crypto trading.