The Anatomy of a Whale self.

Ripple

Submitted an hour ago * by galgitron

Lots of great feedback from my prior post

(https://www.reddit.com/r/Ripple/comments/7pzd7f/heres_what_will_determine_the_actual_underlyi
ng/) has prompted me to attempt an even LONGER dissertation (you love it, stop whining) on the nature
of Whales and their feeding cycles. This is ENTIRELY my own thesis, terminology, and beliefs; all based
on my years of experience in trading and the various discussions and observations that I've had over
those years. Apologies for the length, I did try to keep it entertaining, but there's just a lot of
information that had to come out in order to complete the picture. DO NOT ask me for citations, links,
predictions, proof, or otherwise substantiate my findings here. This is an OP-ED piece, and you can do
whatever research you want based on what you read here, but I won't do it for you. That being said, if
there's something obviously wrong with what I say, please do point it out, with the caveat that I may not
agree with your feedback. DO NOT send me questions in PMs, earn your karma like everyone else did
and post it publicly. Do not ask me any questions that are answered by Ripple.com. BE
KNOWLEDGEABLE, DO YOUR HOMEWORK FIRST! As always, please read the whole post including the
comments, before you comment. This will be a very controversial topic so I welcome challenge, but if
you show disrespect, I'll verbally pound you into dust with spectacular nomenclature. Always downvote
trolls so they get filtered out.

NOW, onto business. Before we begin, we should take a hard look at ourselves first.

The Average Investor

Playing with relatively small money (maybe $20 - $10k), but it seems like a lot to them, more than they
should be risking

Exhibits compulsive tendencies, which led them into this risky trading arena in the first place

Has very little experience trading

Trades emotionally instead of strategically

SUPER impatient

Trades often, sometimes multiple times a day, doesn't sleep, eat or shower, looks like a crackhead,
unhappy

Tends to exhibit strong brand loyalty; personifying and emotionally attaching to and vigorously
defending their chosen coin, and venomously and perpetually hating on any coin that mistreated them,
or even if the other coins are just doing better.

Easily swayed by opinions of others, particularly media, even if disreputable. Highly reactive to FUD or
FOMO.

Focuses mostly on a coin's unit price, and ignores/misunderstands other values like volume, market cap,
order book, walls, etc.

The Experienced Investor

Lost a FUCKING OBSCEEEENNE!!!...amount of money during their progenitor Average Investor stage.
Lots of battle scars

Trades in a goal-oriented fashion, by the book. No emotional trades at all.

Knows how to capitalize on common opportunities (buy the dip, buy the rumor sell the news, don't
chase, etc.)

Doesn't have brand loyalty, looks only at fundamentals defined by a coin's utility, can shift position quick
when it makes sense

patience is their game

Doesn't have much invested in shit coins, but some, just in case they get lucky. Most of their money is in
the coins they see as having long-term potential
Sleeps well, learning to be a chef, smells the roses, writes on Reddit a lot, sexy

Rarely trades big amounts, but probably trades small amounts frequently in the shit coins for fun

Can pick out FUD and FOMO manipulation a mile away. Doesn't trust ANYBODY or ANY MEDIA outlet
whatsoever. They know that everyone and everything is full of shit just trying to pump their coins or
FUD everyone else's.

Pays close attention to sharp volume changes indicative of insider trading, instead of watching the news

Uses TA for the only thing it's good for, which is predicting when the next grocery bagger is going to
promote TA

Recognizes that bots are an essential tool to be able to capitalize on 24/7 trading opportunities. Most
probably don't have access to bot-tech, but the majority of bots out there are run by people in this
category.

And now the star of our show:

The Whale Investor

At its most fundamental definition, a whale is someone or some entity that controls a very large stake in
a coin, such that they can significantly influence price and volume should they choose to buy and sell in
large quantities.

As I see it, there are 3 types of whales: benevolent (wants to act in ways that benefit everyone), long-
term stakeholder (holds a lot but doesn't actively trade any of it), and profiteer (trying to increase their
net worth). I will focus mostly on the profiteer for the remainder of this post because they represent the
most critical influence upon a coin's real-time value.

Whales are investors, just like the rest of us, and with absolute certainty, they want their investment to
increase in value over time. REALLY beat that into your brain, recognizing this fact is absolute key to
becoming an experienced investor. Keep beating it into your head. More.
GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY GREEDY
GREEDY GREEDY. Bottomless, ceaseless, satanic GREED!!

They are not suicidal. They will not destroy the value of their assets by dumping all at once. Understand
that whales cannot possibly cash everything out at once because if they try, they will absolutely crush
the price, and the vast majority of their remaining coins will be worthless. It would be utterly senseless,
literally burning money, and goes against their very nature that made them whales in the first place. Do
not expect self-destructive behavior from any kind of whale. It still amazes me that people even now still
think that Ripple might want to dump all their XRP on the market... Why people? Why? Would you drive
a car off a cliff just because you can?? Ridiculous.

GREEDY

Whales can and do work with each other, literally, or passively. They need to be coordinated in order to
avoid tripping over each other, canceling out their mutual efforts. They either form private groups
(finding each other on forums with throw-away accounts to disguise who they are), or they watch other
whale activity (which is quite obvious to the trained eye) and synchronize their bots, or let the other
whales do all the work and just compete for the coins that get shaken out by loose hands (that was a big
hint, day traders).

Don't confuse them for insider traders. Some of them may be, but that's not necessarily common. Their
only advantage is being able to move the market, not see what's coming.

So where do whales come from?

Whale Creation

Ask yourself, if you could go back in time to when XRP first came out at half a cent, how much would you
buy? Right, lots and lots and lots. I'm certain most people could've even afforded a million XRP ($5000
worth at the time). You could've been a whale today too if you took this chance. So imagine how many
perhaps wealthy people saw this relatively unknown coin, felt like gambling, and threw $500,000 at it.
That's right, 100 million XRP. Some people have that kind of money to gamble with, and a lot of them
are looking for the next bitcoin, and all the stars align with XRP, so why not? So they take a chance. A
whale is born. He's cute and small and the other fishies laugh at him, but he's got a glimmer in his eye,
and nothing but time to kill.

How do they do the things they do to the price?

The Whale Toolset

VISIBLE BUY or SELL WALLS. The whale will put a relatively HUGE buy (or sell) order on the order books,
effectively absorbing every sell (or buy, respectively) order that comes in, keeping the price from
increasing (or decreasing) until the overall sentiment changes and the price goes the other direction.
This is why it's called a wall. The fact that this wall is visible to the public means they are sending the
message, "There's no hope of getting the price past this barrier, so you might as well give up"; and with
a significantly large enough wall, they will succeed in preventing a price breach. Moreover, a visible wall
works quickly because investors give up trying to break the wall long before they run out of capital. The
visible wall is used by whales to coax investors in the opposite price direction (like corralling cattle), at
minimal cost to themselves because very few orders against their wall would've been executed before
the price turned around.

INVISIBLE BUY or SELL WALLS. This is a little harder to spot, intentionally so, and this strategy is used so a
whale can quietly accumulate or liquidate some or all of their holdings. Their bot will continuously put
sell (or buy) orders in for small amounts (possibly on multiple exchanges simultaneously to increase the
flow rate), and as they get consumed by trades, those same orders are repeated at similar amounts,
until the desired overall sum of holdings are converted. Generally there is a strong buy or sell sentiment
being acted upon by the investors, which steers capital flow into consuming the hidden wall. By not
putting the entire amount up for sale (or purchase) in a large visible order, there's no indicator to
investors just how big the invisible wall is. They aren't discouraged like they would be with a visible wall,
and are more likely to keep pumping against the hidden wall, using a lot more capital than they would if
the wall was visible, allowing the whale more of the desired liquidation or accumulation.

DRIVING THE PRICE. During periods of low volume (lulls in trading activity), they can use multiple
exchange accounts (controlled by one bot, or different whale-bots working together) on an exchange, or
even multiple exchanges, to 'buy' and 'sell' low volumes of coins (microtrades) between these accounts,
while also consuming a thin order book. Despite that this trade volume is very small, and doesn't even
cost the whales that much, they can over time, DRAMATICALLY change the currently traded price in
whatever direction they wish. The faster the price-change drive, the harder it is for the whales because
the order books typically have large walls a short distance from the current price, but a very slow patient
change allows the rest of the order book to recenter so the whales don't hardly need to consume the
order book at all, instead just trading between themselves for near net zero costs

PROPPING. This is the act of locking in a new price plateau by sustaining the price where they want it
with continued microtrading. This behavior is typically seen after a parabolic and subsequent correction.
The intent is to allow the price time to consolidate (which really just means build confidence in other
investors that the new price will hold). This can take some time, but eventually the price sticks without
further propping as investors get used to seeing the new price.

FAKE-OUT. They know other people's dumber bots are out there, and they also know people have stop-
loss orders set up on the exchanges (by the way, I'm firmly convinced that Bitstamp has a premium
members-only portal where other people's stop-losses can be seen. Don't ever think you're invisible). By
intermittently performing a rapid price drive down, the whales can trigger a bunch of stop-losses and
bot aneurysms, scoop up the cheap coins, and bring the price back up before human panic ensues.

And everyone's favorite, THE GRIND. Tick, there goes another percent.. Tick, there goes another
percent.. Tick... It's Chinese drop torture (ba-dum dum). Whales just slowly burn away at the price with
spread-out microtrades, until someone after 5 days of no sleep finally completely loses their shit (I
CAN'T TAKE IT ANY MORE!!!) and sells everything. GULP! Whale buys it all up, and then microtrades the
price back up. The same idiot then sees it going back up, rebuys all the coins he can (which is a lot fewer
now because he's paying more for them than he sold them at), and guess what! The bots sense the
purchase, and start micro-trading down again, which AGAIN panics this IDIOT to SELL everything!! Yes,
I've been this idiot many shameful times...sigh.. I no longer drink.

So let's figure out how this all works together, shall we?

First, let's get this out of the way by starting at the end, because everyone is so scared of this:

The Whale Exit

Often cited as the "pump and dump", this phase only applies to "shit coins with no real utility". Whales
playing in shit coins get in when the price is super low, build a massive holding, and then start
capitalizing on any good news about their shit coin, to use as an excuse for artificially driving the price
up, making the other investors think that the price pump was related to the news. They build artificial
confidence in this coin by continuing to drive the price up with microtrades, and they keep feeding off of
the inexperienced traders that are attracted by the perceived gains that think they might also catch the
wave. At some point, the whale decides to sell off so they wait for further good news (sometimes even
playing a party to producing said news), pump the price a bit more, and then use a hidden sell wall to
exit their position as all the inexperienced investors rush in. Once the whale is completely sold off,
there's nothing to prop the price up (whale's gone), and the coin dumps hard as everyone scrambles to
get out.

For "coins with utility" however, the whales know that there's inherent and increasing value to the coins
so their strategy is the complete opposite, they don't pump these coins beyond inherent value, rather
they try to suppress their prices, and they have no plans on cashing out while there's still promise of
further growth. They just keep on playing out the feeding cycle (explained below) over and over and
over. Some of you may believe that at some point they are 'rich enough' and will stop manipulating the
market...phffft... Sorry my friends, greed is more addictive than crack, a self-reinforcing lizard-brain
instinct that heartily bitch-slaps those pesky mammalian brain instincts of love for your fellow man.
Nobody becomes a whale by drawing lines of 'I only need this much to be happy'. Their desired wealth
goals are "more". This is good for us however, because it creates a somewhat predictable larger feeding
cycle:

The Whale Feeding Cycle

PARABOLIC PHASE: Attract the Krill

The setup for this phase is: the whale waits until there's some news that could be considered 'good', and
the volume leading up to it is relatively low. In XRP's case, the opportunity came when Ripple
announced their intent to do the XRP lockup (Never mind the endless other good news for Ripple
around that same time that had absolutely zero impact on the price). Now that there's a seemingly
rational explanation for a price increase, the whales microtrade the price up really fast, sparking an
intense lemming-like investor rally that overshoots on its own momentum, corrects hard (30-50%), and
then stops its freefall when the buys and sells equalize. At this point the whales start propping the price
at this new plateau with microtrades until the price stabilizes on its own. Phase complete. Our baby
whales are suddenly pretty damn big, and it's not likely there will be any new whales coming that can
match these first-adopters. Now we shift to the..

SUPPRESSION PHASE: Weigh down the price

There are two aspects to suppression: killing upward trends, and "grinding" downwards (with occasional
fakeouts to keep it interesting). For killing uptrends, we saw between the XRP parabolics last year that
no matter what good news came down the pipe, the price didn't significantly budge, or whatever budge
happened, didn't stick. Ben Bernanke speaking at Swell? Zip. Partnership with tons of new FIs? Zero. You
can look at XRP for all of 2017 and put markpoints where good news was released, and nothing concrete
happened at all; nothing. This is suppression, and even Ripple, Inc publicly announced they were actively
selling during this time. That's not to say they are entirely responsible for suppressing the price, yet they
acted in a way that may be confused for profiteering, but really, they were using the money from their
market XRP sales to build Ripple out globally, so in reality they were acting as a benefactor whale, which
we'll all benefit from in the long run. Thank you Ripple.

As far as the downward price-grind however, it's quite easy to see that between the parabolics, XRP ran
a repeating pattern of slightly up and slightly down, back up again but not quite as high as the last time,
and then down just a little bit further than the previous time, for months and months. Mental torture.
Realize that inexperienced traders react emotionally and they only value the current price as an
indicator of success or fail. They're not registering the importance that MUFG adopted Ripple and
promoted XRP. They're not registering that central banks from around the world met at a private
symposium with Ripple. They don't care that officials from the Chinese government had a meeting with
Ripple IN THEIR SF OFFICE!.. No, inexperienced investors ONLY see a price descent happening and get
extremely nervous about losing their far-too-large-for-them investment, and their loose hands sell their
cheap XRP. Gobble gobble, whales reset the trap by driving the price almost back to where it was (or
sometimes not even back up if they think they can shake things up just a bit lower), and start grinding all
over again.

Some of you may ask, how does holding the price down help them make money? Look at it this way,
let's say the price of a coin is $1 at the beginning of the year, and they want to cash out at the end of the
year at $10, does it matter if the price is $1 from February to November? Not at all. What happens
between now and the target date is inconsequential in terms of profit. What does matter to them is
trying to get at many coins as possible as cheaply as possible. You've heard the old saying, buy low, sell
high? Well, for us, that's a guessing game, but for whales who can drive the price in any direction, they
can predictably always buy low and sell high because they manufacture the lows and highs. And by
performing these cycles of grinding, they are accumulating more and more XRP from loose hands, such
that when they do allow the next parabolic, their coin holdings are much larger than if they just let the
price grow naturally because the result would be that nobody would be inclined to sell their coins during
this growth period. In other words, suppressing prices means people sell to the whales at a cheap price
and they continue to accumulate, whereas allowing natural price appreciation encourages hodlers
which blocks the whales from increasing their holdings. Make sense now?

STARVATION PHASE:

Whales can only shakeout so many people before there are no loose-handed investors left, and all that
remains are the seasoned investors that stick it to the whales. Won't be taking my XRP!, they cry.
Moreover, if they keep the price down for too long, no new money will be interested to join the party.
Famine ensues. So what's a sad poor whale to do? I've got it! Wait for some related good news, anything
will do, and start another parabolic!..which like clockwork will attract a whole new generation of
inexperienced investors to feed off of! How about a $100 million XRP hedge fund! Nah.. How about
MoneyGram! Of course!! It's so absurdly transparent.

It's also possible for the current whale price-suppression phase to end prematurely if something too big
to control happens, like super-good-news, and the new investors come in all by themselves, naturally
creating a parabolic. Either way, once things settle back down, the whale resets its feeding parameters
to the new plateau, and begins the feeding cycles once again. Wash. Rinse. Repeat. As long as XRP is
expected to appreciate from all the forces that give it value, these feeding cycles will continue, with
intermittent parabolics to keep the fresh blood coming in.

IN CONCLUSION
Overall, the activities of these whales don't define a rate of growth, they simply obscure the natural
increase in coin valuation that only becomes apparent after each new plateau. By drawing a line
connecting the beginnings of each plateau, you can kind of get a sense of the natural rate of growth for
the coin, which too, follows a parabolic. This means the earlier you got in, the more exponential each
subsequent parabolic will impact you, assuming you didn't get shaken out of course. Be careful though,
there's only so many parabolics that can occur before the pyramid corrects, and you don't want to be on
the top floor of that mess. XRP 'seems' to have an enormous amount of headroom still above it, but
that's only as true as how many people also believe that (probably even largely defined by that at this
point in the game).

It sounds sad that we have to deal with these goliaths always playing with our emotions, but when has
Darwinism ever been fair? Have faith that over time, their influences will diminish with more global
adoption and better dispersion of XRP assets. Among all the sound reasons that Ripple, Inc. held onto so
many of their coins, I'd say their ability to act as a benevolent whale if necessary, was the most brilliant,
and their ability to highly distribute more XRP will be the diluting effect upon the whales that we'd all
like to see. That being said, now that you 'get it'. It's quite obvious how you should be trading against
whales.. HODL. Wait for the next parabolic.

However (I'll digress a bit), be responsible and realistic about the likelihood that the parabolics will keep
coming, because that money isn't coming from outer space, it can only come from new investors, and
soon a lot of FIs (we hope). As long as the prognosis for exponential Ripple adoption remains healthy,
we should be good to go for a bit yet, but if competition starts getting a foothold, or somebody hacks
Ripple, or Brad has a sex scandal..er, well that might help actually, anyways, just don't be stupid with
your money; nothing is guaranteed.

This article will probably evolve considerably as the comments come in, so please check again in a few
days to see the changes.

Disclaimers: It's my opinion, do your own research, won't give investment advice, not making it ADD-
friendly, don't smoke crack, yada yada..