📉 Why does the entire market collapse when the price of Bitcoin drops?
🔍 Bitcoin is the cornerstone of the crypto world
It is the first, strongest, and most famous digital asset. Most altcoins are traded in relation to it, and its movement often determines the market mood.
💭 Investor psychology
When Bitcoin drops, fear, panic, and uncertainty (FUD) arise. Investors, especially in smaller coins, start selling their assets, leading to a collective collapse.
💸 Liquidity flow
A large part of the liquidity is tied to Bitcoin. When it declines, forced liquidations of leveraged positions occur, which impacts the entire market.
📊 Dominance factor
Bitcoin's dominance reflects its share of the total market capitalization of digital currencies. When it falls, altcoins drop proportionately, especially the smaller ones.
Do you follow Bitcoin before trading altcoins?
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