When Bitcoin shows upward momentum, that is, when the price rises, people often expect the entire cryptocurrency market to also be invigorated. However, even when Bitcoin shines brightly, a widespread decline in the cryptocurrency market is not uncommon. So, what kind of logic lies behind this paradox?


The surge in Bitcoin's price often attracts investors to fully engage, thereby pushing up the Bitcoin dominance index — this metric reflects Bitcoin's share of the total market capitalization in the cryptocurrency market. As dominance increases, funds and liquidity gradually shift away from other cryptocurrencies (altcoins), leading to a depreciation in the value of these assets.


During Bitcoin's upward cycle, many investors tend to sell their altcoins to increase their holdings in Bitcoin, aiming to profit from the upward trend. This behavior places selling pressure on altcoins, further dragging down their prices, even when Bitcoin continues to rise.


In times of high volatility, 'whales' and institutions usually adjust their portfolios to seek balance. When Bitcoin is highly volatile, they may shift funds from altcoins to Bitcoin to avoid risk. This risk-averse behavior impacts the performance of altcoins.


The upward trend of Bitcoin is sometimes driven by specific news events, such as ETF approvals, macroeconomic signals, or institutional interest, which may not directly benefit altcoins. Therefore, the market reaction exhibits an imbalanced state.


Altcoins often start to gain momentum after Bitcoin stabilizes or reaches a temporary peak. If Bitcoin is in a breakout phase or the early stages of a bull market, altcoins may react sluggishly, only accumulating momentum in the later stages of the market.



In summary, the upward trend of Bitcoin does not necessarily indicate a synchronous rise in the entire cryptocurrency market. Market dynamics, investor sentiment, and timing differences all play important roles. For altcoin investors, patience is often the key to success — the season for altcoin increases usually follows closely after Bitcoin, so it is advised that investors proceed with caution.



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