How can ordinary people identify a whale behind a Token in 10 minutes?

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Author: danny

Many people研究 on-chain data because they want to find out, “Is there a whale (a market maker/‘bag holder’) behind this coin?” Then they go out of their way to avoid it, embrace it, and follow it. But the truth is—coins without a whale simply won’t go up. So the truly useful question isn’t “Is there a whale,” but “Which stage is the whale in”—accumulation, pump, distribution, or have they already left?

First, the conclusion: you can definitely find the whale, because the whale is everywhere.

This article gives you a signal framework both on-chain and off-chain. It’s not meant to turn you into a detective trying to catch the whale, but to help you quickly judge whether this market at this moment is in a stage that’s friendly to retail traders.

I. On-chain signals: what chips and funds are saying

Remember: this version doesn’t lack capital or data; what’s missing is capital that’s willing to step in. Like all games, everything revolves around how to get you to “top up.” As long as you keep watching, with a thousand memes and a thousand faces, there’s always one that fits you.

1: Concentration of token holdings — linked wallets merged for calculation. Concentration isn’t important; what matters is how concentrated it is. Don’t just look at “Top 10 Holders’ share.” Everyone can read that number, and it’s easy to be disguised—whales split the token into 50 wallets, with each wallet holding only 1%. Then the Top 10 still looks “healthy.” The correct approach is to open a professional tracking app to view a bubble chart and merge addresses that are connected (where there’s a direct transfer relationship). Three wallets each holding 2% tokens, if they’ve transferred to each other, means one person effectively holds 6%. Then look at the buy timestamps of these linked addresses—if the concentration happened on the same day or even within the same hour to build the position, ask yourself: do you believe in coincidence?

Funding wallet trace (funding wallet analysis) — where did the initial ETH/BNB of these wallets come from? If the gas fees for 50 wallets all come from the same CEX withdrawal address or the same funding wallet, even if there are no direct transfers between them, it’s highly likely the same person. If someone is spending money on the buy side, what do you think they’re trying to do?

2: Realism of trading volume — Vol / Holder (OI). The 24-hour trading volume ÷ total number of holders = the average transaction value contributed per holder. If a coin has only 800 holders, but a 24-hour trading volume of $2 million, that’s about 2,500 per person on average—this is very likely that a small number of addresses are frantically trading back and forth to inflate volume, or that bots are running. Why would anyone spend money to spoof trading volume?

3: DEX liquidity pool monitoring. Observe changes in LP (liquidity pool) — when whales remove LP / add liquidity, it’s a signal of either running away or “doing maintenance.” If LP is not locked (unlocked), or the lock is about to expire, the risk is extremely high. At the same time, watch how LP depth changes. If the price is rising but LP depth is getting thinner, that suggests the whale may be quietly pulling liquidity, preparing to run while reducing losses; conversely, the opposite can also be a signal.

4: Reasonableness of turnover — 24h Vol / market cap measures how much of the market cap is traded through “per day.” Break it down by hour: if the trading volume suddenly spikes to far beyond other time periods, that indicates someone is concentrating volume. Normal retail trading volume tends to be relatively smooth; sudden spikes are very likely the prelude to something. More valuable than that is to look at net buy volume rather than total trading volume.

5: Number of trades vs trading volume — share of large orders. Look at the average amount per trade within 24 hours. If the top 10% of large trades account for more than 60% of total volume, then the price action is driven by only a few addresses—price movement is completely dependent on those addresses. (A better way is to use the Gini coefficient to quantify concentration of trading value; between 0 and 1, the closer to 1, the more concentrated it is). When these addresses stop moving is more important than when they move.

6: Growth rate of addresses/accounts/OI vs rate of price change — to determine which stage the whale is in. Combine the calculations of the first five indicators (you must process, filter, and compute). Then, based on data analysis, you can judge which stage this asset is currently in.

Accumulation stage: Price is moving sideways at low levels or even slightly down; on-chain large addresses slowly buy in; the number of wallets/accounts doesn’t change much. The whale is quietly collecting chips. (Those counts of linked addresses don’t count.)

Pump stage: For example: if the price rises 30%, but the number of wallets/accounts increases only 5% → chips haven’t been dispersed; a small number of people are effectively self-dealing to stage-manage the pump.

Distribution stage (the most dangerous): Price moves sideways or even slightly down, but the number of wallets/accounts increases (sometimes also reflected in the long/short ratio) by 20% → the whale is slowly distributing at high levels to retail traders. It looks like the “community is getting stronger,” but actually the whale is retreating.

Already gone stage: Price is falling, but the number of wallets/accounts doesn’t decrease → retail traders are stuck holding bags, while the whale has already finished exiting.

II. What after you’ve finished looking?

Alright, you spent the time, confirmed there is a whale, and it’s in the xxx stage. Then what? Switch? Switch again—there’s still a whale. Because—

III. The whale isn’t a bug; the whale is the underlying structure of this game

Why does a Token go up? A pump needs two things: chips + capital. When these two are combined, it’s called pricing power. If chips aren’t concentrated enough and equity is insufficient, there’s no incentive for anyone to pump.

Chip concentration isn’t a conspiracy; it’s a prerequisite for pumping. Without a whale, there is no market action.

IV. What the whale uses to win you

Pricing power is just the entry ticket. What really makes whales win consistently is how they trade—completely different from you. You trade by intuition; the whale trades with a system.

Whale cost awareness: Calculate the profit of pumping and distributing. If EV is positive, they do it. Retail traders charge ahead based on screenshots.

Whale probabilistic thinking: Continuously adjust probabilities and positions. Retail traders repeatedly bet.

Whale exploitation of psychology: Create FOMO and use sunk-cost to make you hold on until you die.

Whale tool advantages: They can hedge, and they have cost/information advantages. Their operational dimensions and fault-tolerance overwhelm retail traders.

V. So how do retail traders win?

In the whale’s home field, using the whale’s rules, retail traders can’t win. There’s comprehensive information/tool/psychological asymmetry. But among all this asymmetry, there is one that can be broken.

VI. The biggest structural flaw of retail traders: they can only go long

When there’s no perp (perpetual futures), the whale indeed can only go long—but he doesn’t need to short. The reason is costs.

The whale’s token cost is close to zero (gas fees or early extremely low prices). Even if it drops 90%, he still makes money—he just “makes less.” Ultra-low cost gives them enormous fault tolerance.

But retail traders chase in during the FOMO stage, and their costs might be 50 times the whale’s. Your cost structure determines you can’t withstand drawdowns. Retail traders don’t have shorting tools and also no low-cost safety buffer. The only scenario where you can profit is: you bought and it went up, and you sold before the drop.

One direction, one window—fault tolerance is almost zero. This is structural unfairness.

VII. What if retail traders could also short?

When the signals point to the distribution stage and fake prosperity—then you’re not just “get out quickly.” You can open shorts, turning the whale’s distribution into your profit. When the truth returns, you can stand on the winning side. Your analytical ability finally stops being wasted.

VIII. Mechanism perspective: with shorting power, can retail traders gain pricing power?

Straight to the conclusion: no.

The formula for pricing power will always be: chips + capital. The essence of retail traders is a group with dispersed capital, fighting individually. Even if the mechanism is brilliant, it can’t turn a pile of scattered sand into a cannon. But introducing decentralized spot leverage and lending protocols isn’t to let retail traders “be the whale”—it’s to break the whale’s “absolute monopoly” on pricing power.

From a mechanistic breakdown, this reshapes the structure along three dimensions:

Artificially create “sell orders,” depriving one-sided control: In a pure spot market, if the whale doesn’t sell, there’s no sell pressure; left hand sells right hand and it can pump. But once shorting mechanisms are introduced, retail traders can borrow tokens via over-collateralization and dump them into the market. The previously “locked” dead chips become active sell orders. This forcibly increases the real capital cost for whales to pump. If the whale wants to continue pumping, they must actually pay cash to absorb the sell orders produced by shorts.

Symmetry in price discovery: Puncture “fake narratives.” Previously, when retail traders detected the whale distributing or narratives being disproven, retail traders could only “not buy,” and bad news couldn’t be reflected in downside moves. With shorting mechanisms, retail traders can turn “bearish information” into concrete sell orders, making price action no longer a one-way game drawn by the whale, but the real result of bull-bear competition.

The shift from “chicken” to “hunter”: Shorting mechanisms actually accelerate the lifecycle of Meme coins. This mechanism can’t make you into the rule-setting whale, but it turns retail traders from “passive victims getting slaughtered” into “hunters holding a gun.”

IX. But shorting isn’t a cure-all—risks you must know

Shorting Meme coins is extremely high risk, and theoretically there’s no limit to losses. The whale’s most skilled move is squeezing shorts. Intentionally raise the price to trigger liquidations from the shorts, using your liquidation funds to push the price higher. If the timing is wrong, even if the direction is right, you still lose. Also, low liquidity means big slippage, making the cost of shorting very high.

Shorting isn’t “you can profit if you understand it.” It gives you another direction choice. You still need to control position size and set a stop-loss. Shorting turns you from “chips” into a “player”—and players can lose too—just with more dignity.

Final

This article doesn’t teach you “how to avoid the whale.” It teaches you to understand:

The whale is everywhere—don’t look for “coins without a whale.” The key is to judge which stage the whale is in.

Retail traders’ biggest disadvantage is a single direction. Whales have low-cost safety buffers; you don’t. If you understand the pump, you can profit; if you understand the dump, you can only run—this is unreasonable.

Shorting power is the last missing puzzle piece that lets retail traders move from “getting harvested” to “sitting at the table.”

It’s a weapon, not a talisman. Even if there’s the risk of this gun exploding, having a gun and not having one are two completely different levels of the game. What we need is “equivalent armament,” so retail traders can also have the ability for two-way gameplay.