- Whales start off the week with a spike in activity in altcoins AAVE, COMP, CRV, IMX and YGG.
- AAVE and CRV witnessed an increase in supply on exchanges alongside massive whale transfers, signaling downside volatility.
- Whale activity is likely bullish for COMP, as there is an increase in whale holdings and decreasing supply on exchanges.
Whale activity, or moves made by large wallet investors, typically influence token prices and market capitalization. A rise in whale activity is associated with increased volatility. Large volume transfers valued at $1 million or higher are indicative of whales making moves in an asset.
Also read: Top 3 undervalued cryptocurrencies in their opportunity zones during Bitcoin season
AAVE and CRV whale transfers signal downside volatility
Aave (AAVE) and Curve Finance’s native token (CRV) witnessed whale transfers worth more than $1 million on Tuesday. Based on data from crypto intelligence tracker Santiment, the supply on exchanges for these two tokens has climbed consistently over the past week and the supply of the assets held by large wallet investors as a % of total supply has declined.
 [13.01.10, 29 Aug, 2023]-638288929422368510.png)
AAVE and CRV supply held by top addresses vs supply on exchanges vs price
The above two on-chain metrics help determine whether whales are accumulating or shedding their holdings by sending them to exchange wallets. In the case of AAVE and CRV, it is likely the latter. Whale transfers greater than $1 million are associated with volatility in the two altcoins, however, a closer look reveals a higher likelihood of downside volatility.
 [13.03.24, 29 Aug, 2023]-638288929849637174.png)
AAVE and CRV whale transaction count (>$1 million), noted on August 29
COMP price likely to recover with rising whale activity
In the case of Compound (COMP), whale transfers greater than $1 million are likely bullish for the asset and capable of catalyzing a price recovery. Data from Santiment reveals that whale transfers have coincided with peaks in the asset’s price in the past.
 [12.41.48, 29 Aug, 2023]-638288930801234081.png)
COMP whale transaction count (>$1 million)
COMP supply on exchanges and whale token holdings are inversely proportional at the time of writing. A rising volume of whale holdings alongside a declining supply on exchanges is a bullish sign for the asset’s price.
 [12.43.37, 29 Aug, 2023]-638288931190914120.png)
Supply held by top addresses vs supply on exchanges vs COMP price
On-chain analysts at Santiment urge traders to pay attention to altcoins with greater than $10 million in transfers like Immutable (IMX) and Yield Guild Games (YGG), for price volatility this week.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
XRP price stuck under $0.65 despite Bitcoin hitting $38,000 three times in one week
Ripple (XRP) and Bitcoin (BTC) prices do not show parity. Despite both featuring among the crypto top three, Ripple price is stuck under $0.6500 while Bitcoin has managed to foray north, testing the $38,000 psychological level for the third time in a week.
FTX token FTT jumps 8% as exchange wins approval to start selling $744 Million in Grayscale and Bitwise assets
FTX token (FTT) has jumped 8% following news that a US bankruptcy court of Delaware has allowed the now-defunct cryptocurrency exchange to move forward with a November 6 request.
Optimism price slips under critical support as $40 million worth of OP due to flood market Thursday
Optimism (OP) price has dropped 5% in the last day, but trading volume is up a stark 15% over the last 24 hours as of press time. The disparity comes amid expectations of more tokens in the OP market relative to what traders are willing to buy at current prices.
Pando becomes thirteenth BTC ETF applicant as BlackRock presents revised in-kind model
/definition-of-etf-21007500_XtraSmall.jpg)
Amid the ongoing spot Bitcoin ETFs race, a new player has joined the marathon. Pando Asset AG has become the thirteenth applicant even as the US Securities & Exchange Commission (SEC) continues to engage with prospective issuers.
Three key BTC accumulation levels before ETF approval in January 2024
Bitcoin, from a high time-frame perspective, has been in an up-only trend since the start of 2023. BTC has ignored many sell signals due to the likelihood of an Exchange-Traded Fund approval. With the holidays around the corner, falling liquidity could see BTC discounted from its current level, hovering around the $37,000 region.