If you are just starting to understand cryptocurrency, you have probably heard that Bitcoin (BTC) is the main cryptocurrency. But have you ever thought about how its movements affect the entire market, including other cryptocurrencies - altcoins? Let's figure out why the Bitcoin rate is important not only for BTC, but for all other cryptocurrencies.
1. Bitcoin is the king of the cryptocurrency market
Bitcoin is the backbone of the cryptocurrency market. Its market capitalization makes up almost half of the entire market. This means that when the price of BTC rises or falls, the entire market feels its impact. Investors and traders follow its movements because Bitcoin sets the tone for the entire market.
2. Why do altcoins "follow" Bitcoin?
Many altcoins, such as Ethereum (ETH), Litecoin (LTC), and Binance Coin (BNB), often follow in the footsteps of BTC. For example, when Bitcoin starts to rise, altcoins can also start to rise in price. It is important to understand that altcoins are riskier assets, and when BTC falls, they can fall even more. This is because investors see BTC as a “safe” asset in the crypto world.
3. How do crypto seasons work?
You may have heard of the "alt season" - a period when altcoins start to grow much faster than Bitcoin. This happens when BTC stabilizes and investors start looking for new growth opportunities among other cryptocurrencies. At such moments, you can see a sharp increase in altcoin prices, which opens up new prospects for traders. However, this time should be used with caution, because after the "alt season" there may be another correction.
4. What happens when Bitcoin crashes?
When Bitcoin drops, it causes a real "wave" in the market. Many investors are eager to sell altcoins and return to BTC or even go into fiat money. This can lead to altcoins losing value faster than BTC. It is important to understand that such situations create opportunities for those who are willing to buy assets on the decline.
5. News and its impact on altcoins
News is a powerful tool that can either support growth or cause a fall. For example, positive news related to institutional investors adopting Bitcoin can push the entire market up, including altcoins. On the other hand, negative news, such as cryptocurrency regulation, can cause sharp falls.
Conclusion for beginners: what to pay attention to?
If you are new to the world of cryptocurrencies, it is important to understand that Bitcoin sets the tone for the entire market. When BTC rises, altcoins often follow. But when Bitcoin falls, altcoins can lose more in value. Keep an eye on the news and trends, and remember that in the world of cryptocurrencies, it is not only a quick reaction that matters, but also a strategy.
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