Cryptocurrencies fluctuate following the movement of Bitcoin

Bitcoin (BTC) is the most important cryptocurrency in the market, and its influence over the rest of the crypto assets is undeniable. Most altcoins tend to follow its trend, whether upward or downward. But why does this happen? Below, we analyze the main factors that explain this correlation.

1. Bitcoin's Market Dominance

Bitcoin represents a large part of the total cryptocurrency market capitalization, usually between 40% and 50%. When BTC rises or falls, the impact on investor confidence is significant, and this is reflected in the movements of other cryptocurrencies.

2. Bitcoin as a Benchmark Asset

BTC is considered the "digital gold" and the most reliable cryptocurrency. It is the first crypto asset that institutional and retail investors look at before evaluating any other coin. Its performance sets the tone for the rest of the market.

3. Parity in Trading Markets

Many cryptocurrencies are traded in pairs with Bitcoin (ETH/BTC, ADA/BTC, etc.). When Bitcoin rises or falls, these pairs are affected, dragging down the altcoins along with them.

4. Market Psychology and Herd Effect

The crypto market is highly speculative. Traders follow collective behavioral patterns, creating chain reactions. If Bitcoin crashes, many investors panic and sell other cryptocurrencies, amplifying the overall market decline.

5. Impact of News and Regulations

News about Bitcoin (regulations, institutional adoption, ETFs, etc.) often influences the entire crypto ecosystem. A regulatory decision affecting BTC directly impacts market confidence, affecting the altcoins.

6. Liquidity and Trading Volume

Bitcoin has the highest trading volume and liquidity in the crypto market. When there are large movements in BTC, traders adjust their positions in other cryptocurrencies, causing similar movements.

Conclusion: they were right......