When the price of Bitcoin shot up, the majority of popular Altcoins also jumped sharply. Is there any effect on the price of Bitcoin on other crypto currencies?
Often when we see when the price of Bitcoin shot up, the majority of popular Altcoins prices also jumped sharply. Therefore, there is an assumption that there are influential relationships between them. However, this correlation is not always fixed. There are times when the price of Bitcoin rises, some Altcoins actually decline. The topic of our discussion this time is to examine thoroughly the effect of the price of bitcoin on other crypto currencies, taking into account the correlation that has occurred.
Relationship Between Bitcoin and Altcoins
The price movement of Bitcoin is generally able to influence the price of Altcoin. Relationships are not always predictable, but there are some of the most common trends.
In simple terms, there are several trends that have historically occurred between Bitcoin and Altcoins. However, it should be noted that every event in the future is not necessarily the same as in the past, and anything can happen. Some examples of cases that we will discuss are trends that must be considered, not a definite reference in the future.
In general, the main currency in the crypto market is Bitcoin. Although fiat, Ethereum, and Tether currencies are also often used, Bitcoin is the main currency. In other words, Altcoins tend to be used to fund Bitcoin running, and Bitcoin tends to fund Alt's operations. Given this relationship, the movement of the price of Bitcoin tends to have an effect on the price of Altcoins.
When the price of Bitcoin rises quickly, the possibilities that will occur are:
- Atcoins will be depressed because money flows into the Bitcoin market.
- Altcoins will go up, because fiat currencies flow throughout the crypto market in general (this phenomenon usually occurs when a new wave of adoption occurs).
When the price of Bitcoin falls rapidly (for example, it is affected by the highly anticipated Hard Fork), the possibilities that will occur are:
- Altcoins are depressed as the impact of money flows into fiat.
- Altcoins cause an unexpected boom (sharp rise); especially in BTC couples, because money flows to Altcoins through the sale of BTC.
When the Bitcoin price is stagnant, the possibilities that will occur are:
- Altcoins also became stagnant, because at the same time when people waited for a clear sign of the direction of the market.
- Altcoins is experiencing a big increase, because people are looking for returns in alternative coins, and trying to get profitable trading in BTC / ALT pairs (Bitcoin / Altcoins). This case example occurred in December 2017 and January 2018, when BTC was stagnant, Altcoins actually booked significant growth.