The crypto market is an ocean. Most of us traders are the small fish, retail participants who ride whatever waves come our way. We celebrate the good ones, brace for the bad ones, and rarely influence anything. That part belongs to the whales.
When a retail trader buys 0.01 BTC, nothing happens in the market. When a whale decides to move a few thousand coins, everything tightens up.
Traditional retail traders rely on chart patterns such as candles, RSI, and MACD. They have their value, but they are backward-looking; they summarize what has already happened.
On-chain analysis shifts that angle. Instead of just staring at the surface, you get to see what's underwater. You can spot meaningful shifts in supply and liquidity before they show up in price.
Retail investors, typically holding less than BTC, amplify market sentiment through social media engagement and hype cycles. While they account for 70% of daily token transfers, their aggregate holdings represent less than 20% of Bitcoin's total supply.
This dichotomy was reflected in January 2025, where retail investors transferred 6,000 BTC ($625 million) to exchanges, reflecting profit-taking behaviors despite bullish sentiment.
Nevertheless, their contribution remains subsidiary to whales, as altcoin rallies driven by retail have rarely been sustainable without whale liquidity support.
Key takeaways
- Retail traders account for 70% of daily token transfers, but their aggregate holdings represent less than 20% of Bitcoin's total supply.
- In crypto, whale wallet addresses are anonymous, but their size tells a story. When a whale decides to move a few thousand coins, everything tightens up.
- Retail tends to pile in during optimistic periods and sell during fear. Whales usually make their moves in opposite conditions. Tracking their behavior helps you avoid following the crowd off a cliff.
- Tracking whale activity helps you see the deeper structure: who’s accumulating, who’s distributing, and how liquidity is shifting.
Anatomy of a whale: Who really moves the market?
To track whales, you need to know who's who. Addresses are anonymous, but their behavior and size give enough clues.
- Shrimp (< 1 BTC): Regular retail participants. As individuals, they hardly move the price.
- Crab (1–10 BTC): More serious retail or early adopters.
- Shark: 500–1,000 BTC are wealthy individuals or small family offices.
- Whale (1,000+ BTC): The primary group to watch, as their actions reshape market structure.
- Humpback-5,000+: Institutional or exchange movements; this is where the action is when these move.
The three types of whales
Institutional investors ("Smart money")
Those are entities like MicroStrategy, Tesla, or large hedge funds. They hold for long periods of time; accumulate in size, and rarely sell. When they do sell, it changes the tone of the whole market.
Centralized exchanges ("Liquidity whales")
Huge wallets often belong to exchanges moving funds internally, nothing dramatic. A 100,000 BTC transfer can be a simple security rotation rather than a signal of incoming volatility.
OG miners / Satoshi-Era whales
Dormant coins from the 2010-2011 era. When these move, the market reacts instantly. The assumption is simple: someone who's held for more than a decade usually doesn't move coins casually.
How whales influence price
It's all about liquidity and slippage. A whale that is looking to sell 1,000 BTC with a market order would crush the order book on the way down. They operate differently to avoid that.
Whales have multi-quarter horizons and strategically accumulate during corrections. According to on-chain data, whale wallets increase their holdings by 15-25% during bear markets, using depressed prices as an opportunity to build positions.
A nice example unfolded in December 2024 when whales sold 32,509 BTC per day during the rally, taking profits as retail FOMO-bought. This is a contrarian strategy consistent with historical patterns, where whales accumulate 72% more BTC during dips compared to their retail counterparts.
Buy and sell walls
Buy Walls: A whale places a large limit buy at say, $58,000. It acts like a floor. The smaller traders often buy a little above that level, and that pushes the price where the whale wants it.
A sell wall is an extremely large block of shares for sale at a particular price. For example, there might be:
- 5,000 shares for sale @ $1.57
- 2800 shares available for sale @ $1.58
- 3600 shares for sale @ $1.59
- 100,000 shares for sale @ $1.60
That means there's a wall at the $1.60 mark; that is, there are a large number of shares that need to be bought in order for the stock to go over that price.
A buy wall is the opposite-when bears try to push down the price, backtesting over and over, but they either don't have enough shares to sell or cannot borrow enough to sell short to push the price below where this large block of buy orders is.
Walls are caused by 1 of 2 scenarios:
- Psychological: Many traders feel the stock is worth buying or selling at a very specific mental price point.
- Manipulation: This is when market makers and highly capitalized traders create artificial walls to hold the price down, allowing them to load more or to allow their adversaries to hold while they sell at a higher price. Sometimes, when a buy wall support is approached, they might cancel the order, thus making a sort of "rug pull" effect.
The second situation is much more common; traders seldom hold on to one specific price level unless that price is an important round number, such as $5.
Sell Walls: A large sell order above the current price discourages upward movement until the whale is done accumulating.
This is best explained as an example.
Imagine this, a wealthy individual, let's call him Richard, tells some of his friends who also have a lot of money that he wants to make money on a certain stock. This could be for any number of reasons, such as:
- The company's stock has ample room for growth.
- The stock can be easily manipulated.
The stock has a lot of potential to get big in the near future.
Richard thinks this is a good idea, so do his friends. They all want 1 million of X cryptocurrency. Unfortunately, in the cryptocurrency market, Richard and his friends can't execute all the buy orders at once, or the prices will go sky-high!
When the goal obtained is 1 million, they set up a sell wall in order to manipulate the price downwards. They do this in stages:
They keep accumulating together. Maybe they will get 250,000 of crypto X each. On their specific market, it didn't affect the price that much. Great!
They now set a specific price they feel is low enough for them to be able to reach their 1m X crypto goal. On this particular crypto, they decide to all sell their obtained crypto at $2.40.
Now, between Richard and the group, there is >1 million dollars worth of X crypto selling for @2.40 on the market, a seemingly undervalued price. There is SO much volume being sold now; buying pressure cannot eat through that wall in a reasonable time frame-it would take a very high buying pressure to do so.
What also happens next is important: no one else can sell above that sell wall price until it's gone. The result of this is that people need to sell lower than the sell wall in order to liquefy their stock. This drives the price downwards.
Richard and his friends are now able to safely all get to their 1m X crypto mark without raising the price exponentially! When they decide to rid their sell walls, the price moves up accordingly!
This is slow, controlled pressure-not chaos trading.
Smart money vs. dumb money
Retail tends to pile in during optimistic periods and sell during fear. Whales usually make their moves in opposite conditions. Tracking their behavior helps you avoid following the crowd off a cliff.
Core metrics revealing whale movements.
You only need a handful of signals. No data science degree required.
1. Exchange inflows (Bearish lean)
Coins moving to exchanges from private wallets usually mean someone is looking to sell or leverage them. A sharp inflow during a strong rally is often an alert that large holders are preparing to exit while retail enthusiasm is peaking.
2. Exchange Outflows (Bull bias)
Coins withdrawn to private wallets indicate accumulation and long-term holding. Less supply on exchanges means greater sensitivity to demand. If demand remains steady while supply thins out, upward pressure forms.
3. Wallet-to-wallet transfers
Large transfers between private wallets often reflect OTC deals. These never hit public order books but affect supply. A big OTC buy quietly removes coins from circulation, creating hidden bullish pressure.
4. Dormant circulation
Motion in older coins is a sudden sign of long-term holders cutting their risk or taking gains. When the most patient holders start acting, that's when the market notices.
Tools that make whale tracking manageable
You need on-chain platforms, not standard charting tools.
Whale Alert
Simple and real-time. Good for awareness, but very limited in context.
Arkham Intelligence
Useful to identify specific entities behind wallets; their labeling system cuts down on false alarms and misreads.
Glassnode
Strong for long-term trends and macro context. Better for understanding cycles than for short-term trades.
CryptoQuant
It is excellent for exchange flow data, with their inflow charts and alert system being widely used by traders keeping an eye on market tops and bottoms.
Turning data into strategy
Once you know what to watch, you can build simple strategies around it.
Strategy 1: The accumulation zone
Stagnant price, dropping liquidity, and continuous outflows often hint that the big players are building positions quietly. Sideways markets bore retail, but whales tend to love them. That's usually where early setups form.
Strategy 2: Identifying tops by divergence
Watch inflows on all-time highs and periods of heavy excitement. If inflows are spiking while price continues to push upward, whales may be unloading into strength. It becomes sensible to scale back exposure by tightening stops.
Strategy 3: Whale trap avoidance
Large exchange deposits usually spook smaller traders. At times that’s intentional. Before reacting, check if the coins actually hit the market. If price dips on low volume after a big transfer, there’s a good chance someone is fishing for cheap entries.
The term "whale traps" has multiple meanings across contexts, including natural phenomena, specific feeding behaviors of whales, issues with fishing gear, market manipulation tactics in finance, and even a new conservation technology.
Risks and limitations
Whale tracking is useful, but it doesn’t hand out certainties. A few things can throw off even the most careful interpretation.
The OTC blindspot
A large share of the biggest trades never touch an exchange. A whale can sell 10,000 BTC to another fund through an OTC desk, and the chart barely flinches at first. The supply dynamics still shift, but the impact can take days to show up in spot price. It’s one of those situations where everything looks calm until it doesn’t.
Lagging vs leading signals
Transfers often show intent, not immediate action. A whale might move funds to an exchange early in the week but hold off on selling until the market gives them the conditions they want. Traders who react too fast can get swept up in noise and end up on the wrong side of volatility. Timing is the tricky part here.
Misreads and the “Binance Shuffle”
Exchanges regularly reorganize their cold wallets. Those hundred-thousand-BTC transfers that light up Twitter are often nothing more than internal housekeeping. Tools like Arkham or Glassnode help separate real activity from routine maintenance. If the destination is labeled as an exchange cold wallet, it’s usually just another Tuesday.
Final thoughts
Information keeps you afloat in this market. Most retail traders end up reacting to every gust of wind, price spikes, dips, and headlines, without understanding the underlying forces. Tracking whale activity helps you see the deeper structure: who’s accumulating, who’s distributing, and how liquidity is shifting.
One reminder before diving in: whales play a different game. They can sit on a drawdown for months. They can hedge, ladder, and absorb volatility that would wipe out smaller traders. Their moves offer direction, not a playbook.
Think of whale data as a compass. It points you toward the smart money’s general path, but you still have to navigate using your own strategy, risk controls, and time horizons.
If you’re just starting out, keep it simple. Set up a free CryptoQuant account or poke around Arkham. Observe the flows for a while. After a few weeks, patterns begin to stand out, moments when the water shifts before the surface ripples. Once you get a feel for that, the market stops feeling random, and the waves become a lot easier to ride.
Important Note: TabTrader does not provide investment, tax, or legal advice, and you are solely responsible for determining whether any financial transaction strategy or related transaction is appropriate for you based on your personal investment objectives, economic circumstances, and risk tolerance. TabTrader may provide information that includes but is not limited to blog posts, articles, podcasts, tutorials, and videos. The information contained therein does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the content as such. TabTrader does not recommend that any digital asset should be bought, earned, sold, lent out, or held by you, and will not be held responsible for the decisions you make.
