Bitcoin whale watching is 'useless' for information — Traders

Tracking the wallet movements of Bitcoin ( BTC ) whales — a Bitcoin holder with a significant stake compared to smaller participants — will not lead to “true alpha,” according to traders, despite the metric used to speculate on potential price movements for some time.

“Don't whale watch kids, it's not useful information,” Glassnode lead analyst James Check aka “Checkmatey” wrote in a June 15 X post .

“Not once have I seen true alpha extracted from whale watching. It's good for social media, but is almost never serious nor valuable analysis,” he added.

It is a common belief in the crypto industry that Bitcoin whales with substantial Bitcoin holdings are capable of influencing the market through their trading tactics .

While they can have influence, whale’s movements can be interpreted in different ways, so the data never provides a definitive indication.

For example, dormant addresses with large holdings suddenly becoming active could suggest selling, particularly if they go into an exchange deposit address.

“I caution against using "whale" metrics and making declarations about them,” analyst TXMC, host of YouTube channel Alpha Beta Soup, wrote in a June 15 X post before explaining that when large amounts of Bitcoin are being sold by whales in a short period of time, it doesn't always indicate a sell-off is happening.

“The mechanical stepwise drawdown here speaks to wallet mgmt and you are only seeing part of a larger pie. These are sometimes firms institutions with multiple wallets and hundreds/ thousands of clients,” he claimed.

“Data around these entities is notoriously noisy, and I can almost guarantee that the big 'whale' wallets you're watching are ETFs, and exchanges,” Check explained in a May 7 post .

“Cheap engagement bait in my honest opinion,” he added.

Social media posts covering whale movements tend to generate considerable interest.

Related: Bitcoin price preps for ‘bigger move’ as on-chain metrics ‘reset’

A recent post by pseudonymous crypto trader Marty Party discussing Bitcoin whale activity garnered over 205,000 views.

“Bitcoin OG whales have sold over 50,000 BTC in the past 10 days, totaling approximately $3.30 billion,” Marty Party wrote on June 14.

“While you are scared, whales just bought $1.3 billion worth of Bitcoin,” Bitgrow Lab founder Viviek Sen wrote on June 14.

However, other analysts continue to rely on whale movements as an indicator of price movements.

On May 15, crypto analysis firm CryptoQuant said that Bitcoin whale demand is again in “acceleration mode” following a two-month downtrend.

“Bitcoin demand growth seems to be stabilizing after being in a decelerating trend since March,” it said.

CryptoQuant cited the data to claim that demand would need to accelerate further to sustain this price rally.

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