Why do altcoins follow bitcoin?

[CryptAssist]

Why is it that the moment BTC starts to sway, the other coins follow suit. It would be hard for everyone to sell that much at the same time. It seems beyond just panic selling. They seemed to be directly linked. Inf-fact, BTC going down should increase and encourage altoins as they raise in value compared to BTC as it falls so why this uniform sell off? Something seems weird about that to me. Any real theories, or explanations?

[atrocityx]

TL:DR Simply put, alt gains aren't an indication of more money moving into the market (at least right now), gains are pumped and lost because money is simply being moved around from one position to the next and not indicative of growth.

This is a really complex question and its going to take a lot to answer...  

First of all, bitcoin's stability is the entire market..... imagine it as bitcoin being the trunk, ethereum is the larger branches.. and other altcoins are the leaves... Anytime the trunk isn't healthy the branches and leaves cannot flourish, and will quickly wilt or die.. but when bitcoin's trunk is really strong it creates a healthy cycle for the alts and branches to flourish.   The analogy doesn't answer the question though but it does explain how it operates..but the real question is why?   To me, the main reason this happens is not for fear or panic, but more for an opportunity.  People think of cryptocurrency as long-term investments,, which the market doesn't honor.  As you can see recently with alts pumping then pulling back as BTC needed some support, that simply no new money is coming into this space and is simply moving around.  For example.. look at Tron for its Mainnet or Verge for its lolpornhub announcement.. no new money came into this space for those events, money frankly just moved from one place to another.  Whales and smart money know when BTC is dropping to abandon alts not because they fear having them, but because they can capitalize on the capitulation of noobs and simply just pull their money away and wait for others that don't know whats going on to panic.  But hodling isn't the answer either, since usually when alts pump alot of the gains are often lost rotating from one place simply to another.  Imagine you have like a rotating face.. alts on one.. btc in another.. tether or USD in another.  Alts are completely out of position 2 out of 3 times.. and not only will they not gain, theyll lose to people leaving them to cause a position trade.   So the only way to really deal with this is to buy alts at the bottom of a BTC trend and sell them at the top of a BTC trend.. then either hold BTC to buy alts later or switch to tether and take advantage and double dip of staying in the right facing position.....

The next thing you're going to ask is why doesn't something like TRX/USDT disconnect.. the reason is it gets corrected by arbitrage algo bots.  If there is a way to make money with an unnatural gap selling TRX to USDT and selling USDT into BTC back into TRX, the unnatural gap will be closed.. so even in this instance USDT doesn't make any sense.. on top of that USDT is just an altcoin not proven to be backed up by anything so you'd STILL have to back into BTC or ETHER to cash out back into cash on your preferred exchange.

To be fair, I know it sucks, but its just the way it is.  The best way to deal with this is to do as everyone else does and move in and out of positions that will make you the most money... fundamentally I'm really bullish on a lot of alts, but if you're here to make money you have to play the smart game like everyone else.   People position trade and do whatever makes the most money.. until it becomes a more regulated market and the speculation becomes more real use cases, I would expect it to get worse before it gets better.

[apityeh71]

Personally i also do not understand why all crypto now move going up and down by the same times. Just like the price controlled by one group. A few years ago actually price action of each crypto is much different,  but now they move bullish and bearish at the same times.

[Schwabac]

It is just bassed on people sentiment, it is not because the price is sticked with bitcoin's pattern, that is just a theory.
Well, the price is only affected because of the price in BTC, but it does not affect much as many people think

[atrocityx]

Personally i also do not understand why all crypto now move going up and down by the same times. Just like the price controlled by one group. A few years ago actually price action of each crypto is much different,  but now they move bullish and bearish at the same times.

The amounts of money involved were different though.. its harder to convince people to sell Ripple at fractions of a penny compared to 2.00... I do think it is slightly more position trade heavy in today's market simply because more people are gullible and whales are loading up the position trade manipulation because of the bear market to accumulate since thats the best you can really do now til we get out of this bearish trend.  

I do think trading charts are an example of human sentiment than they are of specific coins or news.. Certain percentages of people will react in grouped ways to certain types of stimulus.. There are people who will dump along with whales at the top, a certain percentage that will be opportunistic and get out early, a certain amount of avg traders with a stop loss, noob traders into capitulation, etc.  The avg trader since the December runup I think is much easier to get to extreme bag hold and sell in capitulation over follow more sound strategies, so its easier for position traders and whales to get what they want since larger percentages of people give them the result they desire.

[kujaroth]

Maybe it is about the balance. Bitcoin is the biggest player in the cryptocurrency. Maybe that's why. In every action there will be equal or opposite reaction.

[gerald246kru]

Why is it that the moment BTC starts to sway, the other coins follow suit. It would be hard for everyone to sell that much at the same time. It seems beyond just panic selling. They seemed to be directly linked. Inf-fact, BTC going down should increase and encourage altoins as they raise in value compared to BTC as it falls so why this uniform sell off? Something seems weird about that to me. Any real theories, or explanations?

You can clearly see that the market is fluctuating at bitcoin prices, bitcoin is the most valuable and influential digital currency. Bitcoin price is only $ 100 - $ 200, then the market immediately got a huge adjustment. So when you trade altcoin you always need to follow bitcoin prices to be able to profit the most safely.

[Claudyah]

Personally i also do not understand why all crypto now move going up and down by the same times. Just like the price controlled by one group. A few years ago actually price action of each crypto is much different,  but now they move bullish and bearish at the same times.

are they in a network of the same blockchain or because the nature of the digital currency is the same up and down simultaneously and that determines the value is the capacity of the user? if it is true I think every coin does not have its own specific criteria.

[colkcolk]

Bitcoin is the king in crypto space at least until now, bitcoin is considered a pioneer in cryptocurrency and so far the value refer to USD is the highest among all crypto space. It is also the volume and liquidity is the biggest so it is very reasonable if all alt coins are following bitcoin circumstances.

[Marcel666]

BTC is the most popular currency with the highest market volume.
Changes in market price are first reflected on btc before other coins.

[Tytanowy Janusz]

You are all right but there is something that is main reason for that. All alts fallow bitcoin mainy couse economic reason. Its pure math. Let me explain

Now 90% of any altcoin volume is made in pair alt/btc and only 10% in fiat/alt.

When in 90% altcoin is traded by bitcoin than bitoin drop have to make price drop of altcoin. Why? Beacuse calculated price (btc value x altcoin value in bitcoins) is getting lower and lower beacuse btc value is getting lower. Big USD market is making it more independent from bitcoin move, becuse arbitrage bots buys cheep bitcoin, cheep alft from it and sells it on usd market. So if its big enought it can cover bitcoin drop making alt/btc price higher.  

Thats why etherum is more independent. It has big fiat market with great volume. But still not high enough.

How it looks like now (90% of altcoin volume in btc pair)?
1-Bitcoin price drop.
2-calculated altcoin price $ drop
3-arbitrage bots buys altcoins for btc and sell on usd market making drop there (because its not big enought and loosing with alt/btc market) - without pushing alt/btc price higher beacuse usd market is too small to do that.
4-people seeing price drop are selling to btc and then fiat or hold bitcoin what decrise alt/btc value what even more push price lower and make more investors sell.

Thats why its so mechanical. Bitcoin drops and in the same second altcoin price drops. Bitcoin Price $ drop->Arbitrage bots->alt price $ drop->stoplos/trading bots leaves >alt/btc&$ price drop->investors sells->alt/btc&$ price drop-> next stoplos etc. thats how it looks. When it would be coues by investors decisions only ("ok ill sell becouse bitcoin - main currency- is droping") it wont be that fast i think.

Thats why when bitcoin drop 30% altcoins mostly drop 50%

It will also be possible when altcoins will have their reallife massured value. That will work like bigger usd market.

TL:DR Simply put, alt gains aren't an indication of more money moving into the market (at least right now), gains are pumped and lost because money is simply being moved around from one position to the next and not indicative of growth.

Agreed   Money are pumped into cryptocurrencies mostly by bitcoin. So if any alt drops it only changes hands (someone who has bitcoin now has alt and someone who has alt now has bitcoin - amount of fiat pumped into market is still the same). When bitcoin drops it means that someone pulled money from whole market.

[djkyno]

Bitcoin is the oldest crypto currency, and also it is the most successful one with the highest potential and value, in addition, the Bitcoin's market is the biggest among crypto markets. So it is normal that altcoins follow Bitcoin and get influenced by its market and price.

[amih]

I see this is a common occurrence or frequent occurrence of altcoin price movements will follow bitcoin prices. and I think it's because bitcoin is an icon among other coin types so everyone who will make a purchase on altcoin will follow the bitcoin price movement.

[wantjokull]

Why is it that the moment BTC starts to sway, the other coins follow suit. It would be hard for everyone to sell that much at the same time. It seems beyond just panic selling. They seemed to be directly linked. Inf-fact, BTC going down should increase and encourage altoins as they raise in value compared to BTC as it falls so why this uniform sell off? Something seems weird about that to me. Any real theories, or explanations?

 I think both of them is having some direct relationship as most of the time they dive together. I always connect them in a way such that when bitcoin is dropping then people are actually selling off the altcoins so that they can convert it to the bitcoin. But bitcoin market cap is really huge and thus when people are buying it or converting their altcoins into the bitcoin then doesn’t show up the hikes in BTC market immediately. This effect causes both the market to go down simultaneously. That’s my way of thinking of it, as I have always tried to find the answer for this one and gotten this after studying the market.

[Tytanowy Janusz]

Why is it that the moment BTC starts to sway, the other coins follow suit. It would be hard for everyone to sell that much at the same time. It seems beyond just panic selling. They seemed to be directly linked. Inf-fact, BTC going down should increase and encourage altoins as they raise in value compared to BTC as it falls so why this uniform sell off? Something seems weird about that to me. Any real theories, or explanations?

 I think both of them is having some direct relationship as most of the time they dive together. I always connect them in a way such that when bitcoin is dropping then people are actually selling off the altcoins so that they can convert it to the bitcoin. But bitcoin market cap is really huge and thus when people are buying it or converting their altcoins into the bitcoin then doesn’t show up the hikes in BTC market immediately. This effect causes both the market to go down simultaneously. That’s my way of thinking of it, as I have always tried to find the answer for this one and gotten this after studying the market.

They are economicaly conected. Its not only investors decission. As op wrote it happends too fast. Read my post. I explained how it economicaly works -  how without any investors decision price drops only by arbitrage bots and trading bots. Of cours this is indicator. Investors are doing their job after it. But they are sellig altcoin during bitcoin drop becouse they know it will drop too by their traiding experience. Not becouse bitcoin is the biggest and every has to fallow it. If all altcoins would be separated (traded only with fiat or at liest 90% volume in fiat pair) than it would be like OP wrote. Bitcoin drop would incrise btc/alt price.

[Tytanowy Janusz]

I think because bitcoin is the main coin and only some is independent enough even without bitcoin but most of them are very dependent on bitcoin and when it dumps it gets more and more affected.

Why is it that the moment BTC starts to sway, the other coins follow suit. It would be hard for everyone to sell that much at the same time. It seems beyond just panic selling. They seemed to be directly linked. Inf-fact, BTC going down should increase and encourage altoins as they raise in value compared to BTC as it falls so why this uniform sell off? Something seems weird about that to me. Any real theories, or explanations?

I think why all of the cryptocurrencies follow Bitcoin because it is the leader for all of the cryptocurrencies that's why they follow Bitcoin and the second reason from this is if your currency will travel solo there is no Assurance for the development of it so if you follow the steps followed by the Bitcoin there is little chance available fall back this is the reason for following Bitcoin.

Am I here the only person who came to explain hard topic instead of writing the same sh.... to only increase number of posts?
You realy think that your one sentence started with "i think" is not a SPAM here after atrocityx expaining exacly how it mentaly works in investors head and me explaining how it economicaly work.

[Coroline]

Why is it that the moment BTC starts to sway, the other coins follow suit. It would be hard for everyone to sell that much at the same time. It seems beyond just panic selling. They seemed to be directly linked. Inf-fact, BTC going down should increase and encourage altoins as they raise in value compared to BTC as it falls so why this uniform sell off? Something seems weird about that to me. Any real theories, or explanations?

because bitcoin is the reference of all coins, maybe that's a brief explanation. but in fact it is, when bitcoin down altcoin follows it. and some other reasons like panic when they see bitcoin prices go down, they will sell their altcoins. with altcoin reasons going down if bitcoin prices go down.

[salintheonline]

This depends on the coin. Ethereum, for example, is not very related as its blockchain structure and network serves different functionalities than Bitcoin. Take Litecoin, a smaller and more efficient bitcoin made to solve bitcoin’s problems. Where bitcoin can be used, litecoin, in theory, can be used better therefore they are much more closely tied.

[maemunah]

Bitcoin is the king in crypto space at least until now, bitcoin is considered a pioneer in cryptocurrency and so far the value refer to USD is the highest among all crypto space. It is also the volume and liquidity is the biggest so it is very reasonable if all alt coins are following bitcoin circumstances.

that's really true and bitcoin is arguably the mother of altcoin. because the first coin born in the online world is just bitcoin. hence when the bitcoin price rises then the altcoin coin will also follow up and vice versa

[crisanto01]

Of course, they will follow bitcoin because, due to bitcoin crypto started that is why they want to follow the footsteps of bitcoin too, everybody nowadays love bitcoin so the demand is increasing that is why altcoins are doing everything for them to be like bitcoin.