How Strongly AltCoin Value Connected to Bitcoin?

[imteaz]

I have notice last few months, when Bitcoin goes down, almost all alt follow the same path and goes down. And when Bitcoin goes up, and almost all coins goes up too.
Is it because most of bitcoin holder also hold Altcoin? or is it the valuation somehow connected to bitcoin. So lets say bitcoin fall so badly next month, what going to happen to Ether & Litcoin? could they hold their strong position or they will also face the market cap loss? This is very interesting to see next few months.

[Cipa]

Are you sure you're looking at LTC/USD and ETH/USD charts? There are correlations of course, but altcoins are not entirely linked to BTC. It can often even happen that people buy up altcoins when BTC prices start to fall raising ALT prices. Economics are really complex and unpredictable, but I don't think that BTC will fall in the next few months, don't worry.

[Sendibere]

It connects because of the Altcoins sales tool is Bitcoins. If you purchase Ethereum the primary you can use to buy it is Bitcoins. So if the Bitcoins fall, Altcoins have the possibility to increase. And if the Bitcoins are rising, altcoins are likely to fall. And since there's a reason for everything going on, Look at the percentage of the market list if it's up or down

[imteaz]

Are you sure you're looking at LTC/USD and ETH/USD charts? There are correlations of course, but altcoins are not entirely linked to BTC. It can often even happen that people buy up altcoins when BTC prices start to fall raising ALT prices. Economics are really complex and unpredictable, but I don't think that BTC will fall in the next few months, don't worry.

What i meant is, 2 weeks ago Bitcoin fell to 3600, and with it every alt coin price went down too. Now look at today, bitcoin prices goes up and rest of the altcoin price also going up.. So i believe somehow bitcoin has relation with altcoin market.

[hatshepsut93]

I have notice last few months, when Bitcoin goes down, almost all alt follow the same path and goes down. And when Bitcoin goes up, and almost all coins goes up too.
Is it because most of bitcoin holder also hold Altcoin? or is it the valuation somehow connected to bitcoin. So lets say bitcoin fall so badly next month, what going to happen to Ether & Litcoin? could they hold their strong position or they will also face the market cap loss? This is very interesting to see next few months.

If you want to better understand connection between BTC and altcoin prices, try switching from USD to BTC prices back and forth. You may notice that BTC price of alts is usually random and doesn't react to the USD price of BTC, or their BTC value crashes if BTC value in USD crashes. This means that USD value of alts is strongly pegged to BTC - their BTC value doesn't adjust to the value of BTC. This means that even though Bitcoins marketcap is only 67 billions out of 142 billions of total crypto markets, it's actually playing a key role, and if it would go to zero, alts would sink too. That exception that I've mentioned before - the case when alts drop when BTC drops can be explained by the fact that some people sell their altcoins for BTC and then sell BTC for fiat, because they simply can't sell alts directly for fiat, hence causing their BTC price to drop.

[MissionPhailed]

I have the impression that if the value of BTC goes up, alts will generally go up too but with some delay. This makes sense as BTC is a well-known and most prominent form of crypto. This causes the inflow of funds into the cryptosphere directed mostly at BTC at first, and then a large portion of alts is affected due to people selling their BTC for a profit and subsequently dive into relative cheap alts in an attempt to make profit again.

[imteaz]

So i understand it correctly that If bitcoin going down, 99% altcoin price will go down too. Doesn't matter in USD or CAD. The whole price value going down with bitcoin. Then i have to say, it is scary for the investor who put money in altcoin. Because It all depends on bitcoin. And that's not good, Caz altcoin does not have independent value, as it is connected to bitcoin. So we should be be careful before we invest money in alt coin.

[VackFromOhm]

There's some correlations between the markets yeah but you can't rely on the correlation exactly. As Cipa said,

Are you sure you're looking at LTC/USD and ETH/USD charts? There are correlations of course, but altcoins are not entirely linked to BTC. It can often even happen that people buy up altcoins when BTC prices start to fall raising ALT prices. Economics are really complex and unpredictable, but I don't think that BTC will fall in the next few months, don't worry.

But, for these past few months the market rose extremely quickly and we had a quick market correction these past few weeks. Nothing to worry about as that is what is expected when the frenzy builds the price up so rapidly, and as it was first with bitcoin, some altcoins did follow suit. Most of my altcoins have been in the red recently, but bitcoin has made its way back up so we can see that there's some difference there.

I'd recommend that you look at coinmarketcap to get an idea of how the markets between bitcoin and the altcoins are related. Check out the total marketcap and you can see some cool correlations.

[HashFace]

I was thinking about this, as well, I would love to get my hands on a daily log of Bitcoin and other altcoin prices and run the correlation in excel.  If anyone knows of such a data source, link it up, and I'll report the results here.  BTW, I'd bet the correlation is very high, at least among the top 50 or so coins.

[v3liana]

indeed i believe bitcoin value is connected with altcoin. as we can see before everytime bitcoin value rise the altcoin usually to follow the flow. And i still believe bitcoin have a lot drive power to determine value of other coin even though many ico is depends on eth value.

[Tony116]

It connects because of the Altcoins sales tool is Bitcoins. If you purchase Ethereum the primary you can use to buy it is Bitcoins. So if the Bitcoins fall, Altcoins have the possibility to increase. And if the Bitcoins are rising, altcoins are likely to fall. And since there's a reason for everything going on, Look at the percentage of the market list if it's up or down

There is direct correlation between bitcoin and altcoins because of this. Great explanation.
To understand this processes more deeply you should learn macroeconomics

[limmousine]

the case when alts drop when BTC drops can be explained by the fact that some people sell their altcoins for BTC and then sell BTC for fiat, because they simply can't sell alts directly for fiat, hence causing their BTC price to drop.

The research is correct, now I understand, why when btc dump alt also come dump.
I guess that's a good thing, if they sell alt to buy btc, its the right time to we buy alt them with cheap price.

[TheUltraElite]

I have notice last few months, when Bitcoin goes down, almost all alt follow the same path and goes down. And when Bitcoin goes up, and almost all coins goes up too.
Is it because most of bitcoin holder also hold Altcoin? or is it the valuation somehow connected to bitcoin. So lets say bitcoin fall so badly next month, what going to happen to Ether & Litcoin? could they hold their strong position or they will also face the market cap loss? This is very interesting to see next few months.

It is not really that easy to compare the altcoin/bitcoin prices and understand their correlation. I myself never understood it properly and there maybe or may not a correlation. Some people say the opposite that when bitcoin rises altcoins fall and when altcoin rises bitcoin falls.

The fact the OP says is due the recent cryptocurrency related news that have appeared which has lead to a fall in the market prices of bitcoin and altcoin simultaneously. This is not the picture that used to be seen previously.

Altcoin and bitcoin prices depend on the people trading them and thus there may not be direct correlation between the two always.

[Marvell1]

Bitcoin is just like fuel for altcoins now. Everybody can buy alts only with bitcoin. So bitcoin is really big daddy of alts

[yndye]

They have a strong connection since many are also trading bitcoin with a base currency of altcoin so they are correlated. Once bitcoin goes down, many people shift their funds to USD or other fiat currency and many trader will also sold their altcoin holdings to take the opportunity of trading bitcoin since it goes down and the possibility of it to go up is higher so they are more confident in trading bitcoin and have profits than waiting for the altcoin to go up. Since trading bitcoin vs. USD has a higher volume, there would be more trading opportunities and earning opportunities as well.

[bitcoinisbest]

Today altcoin exists because of bitcoins. Had their being no btc we would have no altcoin. So there is direct relation I would say between the both in almost majority of the coins. There may be some coins which may rise when the btc is falling but that those % will we less.

[Prodigan786]

Yes even I observed the same but most of the coins price drops while comparing with usd even there will be small impact with all altcoins . Even some of my coins in portflio reduced price more than 300% in recent China Ico and exchange ban.

[mrayazgul]

I have notice last few months, when Bitcoin goes down, almost all alt follow the same path and goes down. And when Bitcoin goes up, and almost all coins goes up too.
Is it because most of bitcoin holder also hold Altcoin? or is it the valuation somehow connected to bitcoin. So lets say bitcoin fall so badly next month, what going to happen to Ether & Litcoin? could they hold their strong position or they will also face the market cap loss? This is very interesting to see next few months.

Not at all. The correlations here are created by bad investing and rumor chasing. That is where the two get joined and that is all. Bitcoin is the middle man to making investments, and when people listen to rumors and such, it ripples outward and that is where the system gets hurt by bad traders or you can say intelligent moves by the traders.

[cryptoGori]

currently all currencies go up and many people have to buy bitcoin to get altcoins. I wonder how high they all can go!