Learn Simple Bitcoin Trading Tricks and Investor Insights From Crypto Whales
- Bitcoin or crypto whales hold large quantities of cryptocurrency.
- When they make huge transfers or buy and sell large amounts of crypto, then their transactions usually make a significant impact on the digital asset market.
- It's good to be aware of this, so let's learn how to take advantage.
Bitcoin whales are individuals or groups who hold vast quantities of bitcoins and can sometimes sway the market towards their preferential price. Bitcoin whales possess extensive holdings can affect large schools of smaller traders with just a few successful trading methods. Despite the power of capital, these whales use simple trading tricks, which in turn maximizes their profits.
Let us look at two simple tricks that you can learn from the whales.
Bollinger Bands are volatility bands placed above and below a moving average. Volatility is based on the standard deviation, which changes as volatility increases and decreases. The bands automatically widen when volatility increases and contract when volatility decreases.
A use case for using Bollinger bands is to identify overbought or oversold market conditions. When the price of the asset breaks below the lower band of the Bollinger Bands, a trader may enter a long position expecting the price to revert back to the middle band. When the price breaks above the upper band, a trader can short the asset betting on a move back to the middle band. This is also known as mean reversion and can be the bread and butter strategy for most traders.
“Buy when there's blood in the streets, even if the blood is your own,” said the 18th-century nobleman Baron Rothchild. This holds true even today. The worse things seem in the market, the better is your chance to make profits. This is the basic philosophy of contrarian investing.
Contrarian investors have historically made their best investments during times of market turmoil. They move against mass psychology and looks for an opportunity of mispricing of the stocks due to consensual opinion. They believe in betting against the crowd.
A contrarian investor tends to get maximum benefits of both good and bad market. Although it’s difficult to go against the herd mentality, however, if you are confident about your analysis, then following contrarian investing approach can make wonders for your investments.
This is risky business too. We have to assess the situation pretty well. Whales by the very definition have a lot of money at their disposal and can sway small markets at their will. All we can say is to keep calm during times of turmoil because it is the best way to have clarity as the future price of bitcoin is likely to have both opportunity and risk/reward involved.