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Presto Research analysts wondered how useful on-chain data about whales is as trading signals.
According to their words, automated services like Whale Alert are popular among traders because they often interpret large transactions, especially deposits on exchanges, as harbingers of certain activity.
However, the analysis of the prices of a number of cryptocurrencies has demonstrated the opposite. The quotes of the majority of coins have hardly changed after large transfers to trading platforms.
"Conclusion: whale deposits do not have sufficient predictive power to serve as reliable preliminary trading signals. Does this make on-chain data useless? No. They are valuable for blockchain indicator analysis, tracking illegal funds, or explaining price dynamics," noted Presto Research.
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