Why Do Altcoins Follow bitcoin trends
For the past 2 years since I have been noticing the cryptocurrency market, it’s only when bitcoin is going bullish that’s when the rest Altcoin go bullish. It’s as if bitcoin determines the bull run for other crypto. But most times, when bitcoin is going bullish other altcoins will be stagnant but when bitcoin is going bearish, you see their price crashing really hard.
In my personal understanding I think it’s because of bitcoin’s dominance. Most coins can’t be bought with fiat and are mostly traded and valued with bitcoin. Since those coins can’t be traded with fiat, most people will have to purchase bitcoin first before getting their Altcoin. That makes the price of bitcoin to increase simultaneously with other altcoins. Same goes with the bearish act too, when altcoins investors are selling, they exchange their Altcoin with bitcoin they sell for fiat.
But then , there are times where you see the price of bitcoin spiking up but the altcoins are stagnant. Well this time most people are just focusing on buying just bitcoin and leaving Altcoin behind. Bitcoin is one of the largest cryptocurrency in the world, the supply is low and a lot of people want to have it.
We can also look at the scenario where the price of bitcoin is really spiking up and the price of altcoins is dipping badly, this is because a lot of people are trying to ride the bullish wave of bitcoin. They want to take the advantage of the bull trend, so they are pulling their funds from Altcoin and riding with the bitcoin bullish train.
When investors are done riding the bitcoin bullish trend, the ones with a watchful eye will start pulling their funds from bitcoin and invest on their altcoins now its way cheaper giving them almost 3X the quantity they had before.
Posted Using LeoFinance Beta
