In the world of cryptocurrencies, it is common to observe that when the price of Bitcoin increases, many altcoins also increase their capitalization and of course their price increases as well. This trend has led me to study the phenomenon and try to formulate hypotheses to explain this phenomenon. We all know that the coins we have in our portfolio move to the rhythm of BITCOIN, to put it in context I will cite some examples, the first includes a more or less stable group of coins that move around $ 1.30 and $ 1.60 when bitcoin moves between $ 58,000 thousand and $ 63,000, these are RONNI, WORLCOIN, RAY, a few cents below are API3, STX, INMUTABLE, ETHER.FI, SNX and the token of the JUVENTUS soccer team and incidentally FET and I say incidentally because this is not its price in relation to BITCOIN; another group that now and always has moved between $1.70 and $1.80 when bitcoin is at $63k is OPTIMISTA, WIF, in this group now is DYM but really this price does not correspond to its BITCOIN Target, it is currently at $1.72 equally incidentally; the other group moves between $1.80 and $2 in this cluster of coins there is CAKE, FRAX, BALANCE, the token of the ROMA football team and incidentally IO.NET. So we can know what will happen to the price of this group of coins if BITCOIN rises to $65k, those at $1.80 will rise above $2.20, those at $1.50 will rise above $1.90. This exercise can be done with all currencies based on their current price in relation to the price of BITCOIN, of course there are exceptions such as FET, IO.NET and DYM whose price reacts to factors outside their narratives, their recovery after a capital flight, the boom in artificial intelligence and computational technologies linked to AI currently in fashion.

So it won't be difficult for you to know how much you will earn with your coins if BITCOIN returns to $70k and even if it reaches $80k. Based on this linear behavior, I want to put forward some hypotheses about why ALCOIN dance to the tune of BITCOIN. These hypotheses are based on the observation and analysis of the behavior of the ALCOIN market so far in 2024. This behavior allows us to determine, just to cite an example, the value of WIF (dog in a hat) when BITCOIN reaches $67k. BITCOIN$67,000/WIF$2.50.

But why do ALCOINs show a trend in relation to BITCOIN when it has been going up and down so far in 2024? First of all, we all know that ALTCOINS use BITCOIN as a safe haven asset, that is, they back their capital in BITCOIN, so that when the price of BITCOIN rises, the capital of the ALCOIN rises and its price will be in accordance with its capital, remembering that the price of a coin is calculated by dividing the number of coins in circulation by the capital of the cryptocurrency. This explains why the price of altcoins has moved this year more or less the same in each fall or rise of Bitcoin, with a few exceptions.

Historically, Bitcoin has been the base currency in cryptocurrency trading pairs. This means that many altcoins are directly exchanged for Bitcoin, creating a direct dependence of their value on that of Bitcoin. Additionally, Bitcoin acts as an indicator of the overall sentiment of the cryptocurrency market. When the price of Bitcoin rises, it is generally perceived as a positive signal for the entire market, prompting investors to buy altcoins.

Exchanges like BINANCE denote their trades in terms of Bitcoin. This reinforces the correlation between the price of Bitcoin and that of altcoins. Then there are trading bots programmed to follow Bitcoin fluctuations, forcing altcoins to move almost in the same way as BITCOIN on real-time charts. These bots automatically adjust buy and sell trades based on Bitcoin’s movements, synchronizing prices based on the trend of the coin’s USDT value over a period of seven months, which has been the average time it has taken me to do this market analysis and be able to present these hypotheses that will allow you to know how much money you will get when BITCOIN reaches a certain price. This is a tool that will help you set stop losses, know how much you will earn and when to take profits. It is fascinating to see BITCOIN try a limited number of times to exceed 63 thousand dollars and then simply give up and go back. Obviously, it is your capital that prevents it from growing. If the Marker Markers at that time injected liquidity into BITCOIN, it would go to 65 thousand dollars without problems.

In rare circumstances, some altcoins may behave differently than Bitcoin. This may be due to the intervention of “whales” (investors with large amounts of capital) who can inflate the value of an altcoin by purchasing large amounts of it. Altcoins can also be affected by negative news, such as capital flight, hacks, CEO resignations, or lawsuits. A notable example is Worldcoin, one of the most controversial coins, which generates numerous weekly headlines, affecting its price both positively and negatively, not to mention token releases or token burns. We must never forget the AEVO effect that led to a coin worth several dollars going from pennies to cents. How could those who lost so much money with AEVO knowing that it would release such an exorbitant amount of its tokens have overlooked it? Its creators also hid sensitive information from holders, causing harm to millions of investors. Although this is not the subject of this article, I cannot help but warn you that you should be aware of the release of your tokens. If it is huge, abandon the project in advance. It is true that there are cases in which the releases have triggered the price of the currency that releases its tokens, but it is not worth taking that risk. You are not a test laboratory or a guinea pig.

On the other hand, it is worth mentioning that platforms like Binance can start early campaigns to promote an altcoin, using influencers to pave the way and increase its price significantly, this is premeditated and calculated, and it is the reason why you will see coins rise beyond their correlation with BITCOIN, and it is true that these coins also rise in other EXCHANGES but remember that it is the Marker Markers who decide and not the platform, unless it has its own COINMARKER like BINANCE that has them.

In short, the relationship between Bitcoin and altcoins is an indissoluble marriage for now, if you want to know how much your project will grow, look at BITCOIN. Although there are exceptions, the general trend is that altcoins increase their capitalization when Bitcoin rises in price due to its use as a safe haven asset, the influence of trading bots and market perception. This hypothesis I hope will provide you with a coherent and realistic explanation of the behavior of the cryptocurrency market and that repeated question in your head of why your coins depend on BITCOIN to multiply your money. A cryptonian hug from the cryptoverse.

Jorge Ferrer

Bachelor of Business Administration