Title: Why do altcoins fall even when Bitcoin rises?
Introduction:
Bitcoin is the king of the crypto market. Every move it makes, whether up or down, shakes the entire ecosystem. But there is a question many ask: why, when Bitcoin rises, do many altcoins (alternative coins) fall or stagnate? Although it may seem contradictory, there are very logical reasons behind this phenomenon. Let's explain it.
1. Bitcoin dominance: The silent indicator
Bitcoin's dominance is an indicator that shows what percentage of the total value of the crypto market belongs to BTC. When this dominance rises, it means that money is leaving altcoins and entering Bitcoin. This usually happens when there is euphoria for BTC or widespread fear, as investors see it as a more 'secure' bet within the crypto world.
2. Market cycles: First the king, then the subjects
In bull cycles, Bitcoin usually leads the way. First, BTC rises, and once it reaches a level of consolidation or lateral movement, investors start moving their profits towards altcoins. But during that first phase, many altcoins fall or stagnate because capital is concentrated in BTC.
3. Drag effect and speculation
When Bitcoin rises too quickly, many traders sell their altcoins to not 'miss out' on BTC's rise. This capital movement can cause falls in the price of altcoins, even if the overall market is in the green. There is also a psychological effect: if BTC is what is 'in fashion,' media attention and trading volume shift towards it.
4. Volatility and misleading correlations
Although altcoins largely depend on BTC's behavior, that doesn't mean they copy its movements instantly. Many times there are delays, and other times altcoins simply do not react in the same way. This depends on factors like their liquidity, community, use cases, and the current narrative.
Conclusion:
Although many cryptos depend on Bitcoin to survive, that doesn't mean they will always rise alongside it. Often, BTC rises while altcoins fall, simply because investors are adjusting their portfolios, protecting themselves, or following the current trend. Understanding this behavior is key to not panicking and better taking advantage of opportunities.
