Why is the Crypto market crashing?
Guys, can you see the crypto markets crashing up. Ofcourse, everyone is witnessing the deep. and many wonder why is the markets falling when we are supposed to be in the anticipated Bull season.
The simple answer is "correlation".
let me explain in simple terms: correlation is a statistical concept in which two or more variable have significant impact on each other.
Now inthe Crypro world, there are only few original block chain that was actually created : The Bitcoin, Ethereum, Tron and about 5 others that has their original idiosyncratic behaviour specific to them.
All other coins and tokens are created on these original chain and so they don't really have their own unique originality. Specifically, most are derivatives of BTC.
Consequently, whatever happen to the mother chain, the derivative chains upon which other coins are designed will replicate the effect.
Second, most coins company reserves and back ups are invested in BTC and the ALTS, for example, Elon Musk who is the largest holder of DOGE, also have reserves of the DOGE token invested in Bitcoin. CZ, who hold the most BNB also have vested interest in BTC and so on. You can see why 90% of the market value are governed by the price of Bitcoin.
That is why a little percentage change in Bitcoin price will have Ripple effect on the general crypto markets.
A good Crypto investor will have to keep a second eye on what BTC has done, is doing, and will do in times to come.
Check my contents for BTC analysis.