- Whale transactions are showing up on altcoin networks of Loopring, AAVE, DYDX and CRV, signaling volatility in these assets.
- Experts believe high volume transactions by whales are red flags that imply extreme exits or redistribution of altcoin holdings.
- AAVE and Loopring prices suffered a decline after the spike in whale activity.
Altcoin prices rallied in January 2023, the best performing month for cryptocurrencies since October 2021. Whales have increased their activity in altcoins Loopring (LRC), Aave (AAVE), DYDX and Curve (CRV).
A spike in whale activities could indicate a sell-off or an increase in volatility among altcoins.
Also read: Why Bitcoin bulls are poised to win Friday’s $1 billion options expiry
Whale activity in altcoins raises red flags, here’s what it means for Loopring and AAVE
Altcoins rallied in the beginning of 2023, doubling their market capitalization and yielding massive gains for holders. Interestingly, large wallet investors have increased their activity in altcoins Loopring, Aave, DYDX and Curve. In these four altcoins, experts have noted the highest activity by whales.
While whale activity is typically correlated with a sell-off or redistribution of tokens, it is a red flag if the altcoin’s price drops. Loopring price yielded 113% gains for holders in the past month. Over the last 48 hours, the number of whale transactions exceeding $100,000 in value have exploded on the Loopring (LRC) network.
With the spike in whale transactions, LRC chart shows minor signs of correction. LRC price is down nearly 4% in the past 24 hours.
Whale transactions on Loopring v. price
Whale activity in Aave is not quite on the level of Loopring. After a 65% price rally in AAVE throughout January, there have three large whale transaction spikes over the past two weeks. The largest one coincided with a local top in AAVE price. Experts at crypto intelligence tracker Santiment consider this a red flag.
AAVE Whale transaction spike coincides with local price top
The largest spike in whale transactions on January 16 coincides with a local top in AAVE price as seen in the chart above.
Whale transaction spike on CRV indicates local price top
While Curve noted 128 whale transactions recently, this spike is not as high as the one seen in January. Despite that, experts believe on Curve, whale transaction spikes have consecutively coincided with short-term price tops four times in a row. This makes whale transaction spike a reliable indicator for a price top in CRV.
Whale transaction count in CRV (>$100,000)
On CRV, whales are known to take profits and exit local tops. An increase in activity by large wallet investors therefore helps traders decide whether to reallocate their portfolio holdings or accumulate more of the altcoin. In case of CRV, rise in whale transactions is an opportunity to take profits and exit before the dip.
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