A Solana whale has been gradually selling off their tokens, employing a dollar-cost averaging strategy rather than making a single large transaction.
This approach has brought their total token sales this year to a staggering $84 million.
Whale’s Steady Sales Strategy
On August 13, blockchain analysis firm Lookonchain reported that a Solana wallet has been steadily offloading tokens since January 15. The whale has transferred at least 594,000 SOL tokens, worth about $84 million, to major exchanges like Coinbase, Binance, and OKX. The most recent sale involved 20,000 SOL, valued at approximately $2.8 million.
This method of selling in small increments rather than in one large lump sum is a clear demonstration of the dollar-cost averaging (DCA) strategy. This approach helps to minimize the market impact and allows the seller to spread out their risk.
Ethereum Whale Follows Similar Pattern
Interestingly, this Solana whale isn’t the only large player employing this strategy. Another whale, linked to the Ethereum initial coin offering (ICO), has been selling tokens since July 8. According to Lookonchain, this Ethereum whale deposited $13.2 million worth of ETH into OKX on August 12, bringing their total sales to $154 million. These sales were made at an average price of $3,176 per ETH.
While these whales are selling, others are buying. On the same day, another Ethereum wallet purchased 5,000 ETH, adding around $12.8 million to their holdings.
Understanding the Dollar-Cost Averaging Strategy
The dollar-cost averaging (DCA) strategy, often used in crypto investing, involves making regular, smaller transactions over time instead of one large, bulk transaction. This strategy is popular because it reduces the risk of mistiming the market, especially in the volatile world of cryptocurrencies. By spreading out purchases or sales, investors can avoid making decisions based purely on emotion and focus on long-term outcomes.
While DCA is commonly recommended for buying crypto assets, it’s also an effective strategy for selling. By gradually offloading assets, investors can secure profits without causing significant price fluctuations.
