We are all constantly monitoring 🔎 the crypto social media and whales, who hold big amounts of cryptocurrency use that fact to fool regular users for their own profit. Let’s see the main tricks to not get caught again.
Who is a whale in crypto?
🐋 A whale is a user, that holds big amounts of cryptocurrency on their wallet - basically a crypto millionaire.
Psychology 🧠 plays a huge role in forming your portfolio and every gossip, spread around the community might result in assets dumping because of how many people start selling their coins simultaneously. It is a win-win situation for those who spread the gossip - they gain access to big amounts of sold assets as well as get loyalty from their subscribers because those believe that an artificial dump was a true signal.
Whales have their own private sources of information, that can help them predict which assets are going to raise interest rates 📈. Thus you could see multimillion dollar purchases of some coin executed by one single wallet - that is a whale preparing for this coin to grow in price.
You couldn’t possibly call that a manipulation - more of a silent signal to invest 🤫.
Not only separate users
Sometimes, even exchanges can try and trick you. There are certified cases of pre-informed exchanges creating artificial price movement in a chosen direction and making a so-called “stop-loss farming” afterwards. Some users have also experienced troubles with opening “sell-stop” and “buy-stop” orders after their first significant futures trading profits, but that looks more like a conspiracy theory than truth because of how illegal that is👮♂️.
Pump & Dump
And don’t forget about the good old pump & dump strategy that even Elon Musk used to do some time ago. A whale just buys big amounts of low liquidity coins increasing the demand artificially and sells them for higher, when more small investors notice that exact coin slowly selling out 😬.
How to avoid being tricked
Short-term investments are like a chess game, where one player has to outplay the other using their skill and intelligence. If you are new to investing try long-term or middle-term first, because you almost certainly lose the chess game to professionals, who have been playing for years♟. If you read through all the mentioned scam strategies, you will notice that only an inexperienced user, who doesn’t do any deep analysis will fall for those - the media influence is too much on you in the beginning. Therefore, don’t go big too soon, because you might go small quicker.
Stay tuned 📻!