Hello everyone. Let me explain.
When I look at the charts of low market cap Coins, I often see that they are flat and suddenly you have gigantic Spikes. It may be due to news volatility or following the trend of the major cryptocurrencies, but…
Is it possible that if a significant amount of a crypto is bought, for example 15-20% of the currency, that strongly pushes the price up?
Because when a whale buys/sells bitcoins or an exchange moves large sums, it produces movements in the price.
It is the same theory.
Are those spikes in small capitalization coins produced by large purchases and their sale when taking profits?
I would appreciate a full explanation in case I am not correct.
All the best
It’s possible, especially for low supply alts, but it could be true for any alt. That’s why they’re targets for rug pulls, because a single trader, whale or not, with even a sizeable trade could move price on their own. Price pumps, and they sell they their majority holding, price tanks.
The truly gigantic whales don’t necessarily buy directly from the exchange, nor do they do it in a single purchase. They could spread out $50m for instance across 1000’s of trades. This keeps price volatility low generally speaking, and minimizes the affects that their purchases now have on purchases in the future.
Whales can buy over the counter (OTC), directly from another wallet holder, or exchange, or exchange to exchange in the case of instituations.
Thanks for your answer.
You mentioned that there are those “whales” that buy a large percentage of the supply, they do it in small quantities, making small spikes, to accumulate… but…
What is the catalyst for that great wick that multiplies x10,x20,x30… to the previous ones
A much larger purchase than the previous ones, maybe?
Because I don’t think it’s for news, since take profits strangely tend to coincide with psychological levels. There is a person (or group) behind them.
If you also know of a post or website where I can read about the subject, I would appreciate it.
With low alts, it’s magnitudes easier to move price by a single whale. Of course once the “train starts moving”, everybody hopes on. You see this is in the social media ponzi schemes related to stocks and crypto of the last 5 years.
Large wicks in a short amount of time ultimately have to be an overall large volume of buying in that time period compared to previous time periods. And again, low volume and low-priced alts can move exponentially when everybody is buying and liquidity becomes tight.
Is there an example coin you have in mind that you’ve been following?
