Ultrasonic wave propagation in the aqueous magnetic fluid is investigated for different particle concentrations. The sound velocity decreases while acoustic impedance increases with increasing concentrations. The velocity anisotropy is observed upon application of magnetic field. The velocity anisotropy fits with Tarapov’s theory suggests the presence of aggregates in the system. We report that these aggregates are thermodynamically unstable and the length of aggregate changes continuously with increasing concentration and, or magnetic field and resulted in a decrease in effective magnetic moment. The Taketomi's theory fits well with the experimental data suggesting that the particle clusters are aligned in the direction of the magnetic field. The radius of cluster found to increase with increasing concentration, and then decreases whereas the elastic force constant increases and then becomes constant. The increase in cluster radius indicates elongation of aggregate length due to tip-to-tip interaction of aggregates whereas for higher concentration, the lateral alignment is more favorable than tip-to-tip alignment of aggregates which reduces the cluster radius making elastic force constant to raise. Optical images show that the chains are fluctuating and confirming the lateral alignment of chains at higher fields.