Let's take an analysis of the **Cake/USDT** pair 2 years back on the daily time frame. From this analysis, we can see the **Accumulation phase, absorption phase, distribution and downtrend phase** which are the four stages that revolves around a whale cycle.
- **Accumulation Phase**: the accumulation phase is the first phase where the Bitcoin whales start accumulating or buying assets in small quantities. These assets are bought in small quantities so there are no obvious market indications that an activity like such is taking place. The market goes sideways and an average trader becomes a spectator at this point, consistently watching to see where price will go next so he can push the buy or sell buttons so as to avoid incurring losses.
The observable low volume in trades and the narrow ranged price action causes the average investor to behave like the market is without activity or is no longer moving and is quiet. Meanwhile, the whales are busy stocking up assets in their possessions in preparation for a run.
- **Absorption Phase**: Now, the absorption phase is an uptrend phase. Once the whales have stocked up their backs in the accumulation phase, they begin to send out market signals that are obvious in the direction they want the price to go. This stage is where the whales start buying in large quantities with the intention of creating obvious bullish signals used by most Traders.
All the whales trigger speculating investors into moving the market in their favour in the stage, the gain very much. As observed in the chart, there is an uptrend with bullish candles that are dominant. This green volume histograms increases serious market activity and size. Wells accumulate gains on an asset but in the accumulation phase.
- **Distribution phase**: distribution phase is where will start taking and profits from the assets they have accumulated in small quantities so it doesn't give off obvious market signals as consistent sells may affect. Since the Investor is still trading with a bullish sentiments, i.e buying while the whales are taking their own profit and then selling, the market is trapped in a resistance zone and begins to trade sideways.
- **Downtrend phase**: in the downtrend phase which is the phase way the market liquidity or circulating supply has diluted and is going down the price. This is when the whales are done taking profits at their targeted price. The small investors have just realised that the whales had already sold most of their assets. As a result, they'll begin to panic sell their assets which brings down the price of that asset.
It is usually marked by a bearish trend where you see the chart shows sharp declines from previous high price levels. The volume indicator would be nominated by long bearish read histograms at this point. When prices have gone low enough, the whales will begin the accumulation phase again and the cycle will continue.
Let's look at the steem token. It has a good market capitalisation which sits at a value of **$116M** with a token value of about as at that time the analysis was made by me which means there are possibilities the price will definitely go up.
Some reasons why I would consider choosing steem as my investment if I was a whale.
- **Liquidity and Yield Farming Pools**: these are opportunities or options provided or given an investor to stake their tokens in lending pools and earn rewards. Aside from the extra earning, these pools help reduce the circulating supply of an asset does driving up its value. Steem is built on steemit and compatible with binance blockchain. Transactions carried out without charges or fees. The price history is very much reputable. If I was a whale, analysis I would have been making would include;
- I will start buying in small quantities at the accumulation phase and then buy larger quantities at the absorption phase to trigger the market.
- I will buy some more at the distribution phase to sustain the bullish momentum.
- I will then do a final by at the downtrend and the likes of them.
**In conclusion**, whale movement no doubt offer investors the opportunity to either get recked or accumulate much gains. The outcome depends on the information he listens to and the action taken after being exposed to such information. Paying attention to and making good use of an on-chain indicator can be a single point of success for the small investors.
**All screenshots are from my binance exchange**
> **Disclaimer** :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have
