Let’s have a brief look at how influential is bitcoin news and price movements in correspondence with the altcoins.
Are altcoins independent of Bitcoin price movement?
As a chunk of this write-up, let’s look at the interrelation among the top cryptocurrencies on the cryptocurrency stock market in the existence and absenteeism of the COVID-19 widespread.
If you’ve been keeping an eye on the cryptocurrency market lately, you’ve likely caught sight of that every time Bitcoin falls in price, alternative cryptocurrency prices (called altcoins) go along with it. When the bitcoin price rises, we expect altcoins to do the same in the reverse scenario.
Since altcoin prices are typically measured against Bitcoin, altcoins follow Bitcoin fundamentally. The reason behind this adverse effect is Many altcoins are just Bitcoin clones.
Before looking into how bitcoin influences altcoins, let’s first look at their relationship. First thing first, Bitcoin is used to purchase altcoins.
The majority of people still believe Bitcoin represents the entire cryptocurrency market. Analyzing past trends is similar to analyzing the stock market’s performance and other equities. In this way, we can state that Bitcoin and altcoins generally have a relationship.
With reference to BTC movements:
The reason altcoins grow fast when BTC moves slowly because traders become impatient while waiting for BTC gains and broaden their search to include altcoins that promise fast profits.
Altcoin prices tend to fall during BTC moons because altcoins are purchased with BTC and because traders tend to return altcoins to BTC to catch the profit train.
BTC falls in value more often than altcoins. Due to limited liquidity, panic selling occurs more readily, hitting investors even harder. Altcoins recover more quickly, which can be a great opportunity for huge profits.
When it comes to the question of whether the correlation between bitcoins and altcoins will fade even further, there are signs that it will do so.
More evidence of secondary markets is appearing, which allows you to purchase altcoins without Bitcoin. Despite a significant decline in Bitcoin’s cryptocurrency market share, the directional drift continues.
The hype surrounding Bitcoin’s rise is starting to wane as people see its flaws, such as its high fees and slow network. Altcoins are becoming more popular as an alternative.
However, it seems likely that the Bitcoin price will play a significant role in your other cryptocurrency investments until cryptocurrency as a whole becomes more established.
