The impact of Bitcoin on other cryptocurrencies is broad and deep, covering several categories of currencies. Here are the most notable currencies that are clearly affected by Bitcoin's movement:
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🌐 Currencies Affected by Bitcoin
1. Major Altcoins
These currencies often move in sync with Bitcoin due to joint trading and market sentiment:
| Currency | Main reason for impact |
|--------|------------------------|
| Ethereum (ETH) | The second largest currency after Bitcoin, often follows its movements due to shared institutional investment |
| Solana ($SOL ) | Depends on overall market momentum and is linked to Bitcoin during both upward and downward periods |
| Cardano ($ADA ) | Affected by overall market analysis and often moves with Bitcoin in the same direction |
| Polkadot ($DOT ) | Depends on market sentiment and is used in trades against Bitcoin |
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2. Meme Coins
Like Bonk, these currencies are heavily affected by waves of optimism or panic resulting from Bitcoin's movements:
| Currency | Notes |
|--------|----------|
| Dogecoin (DOGE#) | Often rises with Bitcoin due to media momentum |
| Shiba Inu (SHIB) | Follows Bitcoin during upward movements, especially when new investors enter the market |
| Bonk (BONK) | As discussed, it has a very high price correlation with Bitcoin (0.94) |
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3. Stablecoins
Although it is designed to be stable, Bitcoin's movements affect its usage and trading:
| Currency | Impact |
|--------|---------|
| USDT / USDC | Used to hedge or exit the market during Bitcoin's volatility |
| DAI / FRAX | Affected by demand during periods of Bitcoin's volatility, especially in decentralized finance |
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4. Currencies traded against Bitcoin
Some currencies are traded directly against BTC, making them mechanically linked to it:
| Currency | Impact |
|--------|---------|
| LTC / XRP / BNB | Used in trading pairs against Bitcoin, making their value linked to its movements |
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🧠 Why this impact?
- Market dominance: Bitcoin represents over 40% of the market cap of cryptocurrencies.
- Market psychology: Investors consider Bitcoin a key indicator, and its movements affect overall confidence.
- Automated trading: Many bots rely on Bitcoin signals to determine market direction.
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