Why do most cryptocurrencies rise and fall together?

[jinneas]

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?

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[jackg]

I think there are a few things at play here:
1. Investors in bitcoin that are likely to panic sell/sell at a certain point are also likely to hold other coins they'll sell.
2. Most exchanges have a pair type for coin/usd and coin/most likely conversion (at least). Any spreads (gaps in the order book) are likely to not stay empty for long - but some do. Also some exchanges might be set up to arbitrage each other (especially if this can be done manually by someone managing some of the exchange's funds).

[Liamttw]

It may be affected by market panic, and investors' blind pursuit of the rise and fall will cause most of the altcoins that continue to appear to rise and fall along with the volatility of Bitcoin.
In most cases, there is a correlation between the price of altcoins and the price of Bitcoin, and will change with the price of Bitcoin. But not all altcoins follow the same rules, and the cryptocurrency market does not necessarily go up and down at the same time.

[Nora Olin]

Because btc in the cryptocurrency represents the king of encryption, if the price of Bitcoin falls, it will cause a certain amount of market panic to flee, and the funds of many institutions will sell their tokens at this time. You can understand Bitcoin as a vane , When Bitcoin falls, the market will panic, when Bitcoin rises, the market will have a lot of capital inflow!

[Strongkored]

Or is it caused by other operations?

It could be, especially if the big investor is the owner of the exchange but unfortunately it is difficult to detect, or other possibilities people who own cryptos other than BTC realize if BTC goes down how can cryptos that have no use value can survive in the downward trend, so panic sell begin and all cryptos suffered down.

[kxwhalexk]

The fundamental reason for the rise and fall is buying and selling

It is difficult for most altcoins to move independently.Especially for those altcoins that are already listed on the exchange.
It is more convenient to buy and sell on a centralized exchange.When Bitcoin price fluctuates greatly，Their prices will fluctuate.

It can be speculated that the price movements of some tokens that are not listed on the exchange have nothing to do with Bitcoin.Their market sentiment is basically not disturbed by Bitcoin, and they only buy and sell in a small circle.

The market is likely to panic. Some unknown altcoin dealers will take advantage of the Bitcoin crash to take advantage of the opportunity to ship, sell high and buy low.

Also there are even many altcoins that will set up a series of automatic trading robots, which will automatically buy and sell according to the trend of Bitcoin. Cause their prices to sync with Bitcoin.

[Kong Hey Pakboy]

This is just a theory but I think that it's because some of them are tied together so for example one of them were to ever go down which causes some of the investors of another coin that's connected to the coin that's going down to think that the prices for the other are also going down.

[Kimberl2020]

Specifically, there are several reasons:

1. Bitcoin is the confidence of the market.

It has been ten years since Bitcoin was founded. After Bitcoin was invented, blockchain applications, ETH, LTC and other digital currencies have been derived. At present, Bitcoin is the only digital currency that has withstood large-scale social experiments, and its success has given people confidence.


2. Anchoring effect.

Whether it is an individual investor or an institutional team, no matter what currency they hold, they refer to the price of bitcoin when trading, and make their own strategies based on the rise and fall of bitcoin.

Bitcoin's rise indicates that the digital currency market is good, on the contrary, when it falls, it indicates that the market is bad. If the market is good, the funds will choose the opportunity to buy and pull the market. If the market is not good, the funds will be sold to hedge and hit the market. When the main force is trading, it depends on the trend of the market. Bitcoin is the market.

3. The BTC trading pair affected the entire market.

The transactions at the beginning were centered on BTC, and USDT only appeared later. All exchanges have BTC trading pairs. The influence of BTC on other currency trading pairs is far greater than that of USDT trading pairs that appeared later. When the price of Bitcoin against fiat currency falls, its impact will naturally be transmitted to the trading pairs of BTC against other digital currencies.

[Caldear]

Bitcoin has developed for a long time. As the mainstream currency in cryptocurrency, it will have a certain impact on other altcoins. Other currencies will also change when the price of Bitcoin fluctuates.
When the price of Bitcoin falls, many investors will feel fear, and at the same time they will have the same psychology towards other cryptocurrencies, they will panic in the crypto market and blindly sell it.

[dothebeats]

Maybe because investors who have something on one coin are also invested on another. And once either of the coins they hold moved towards an undesirable position, they just sell and cut losses before everyone else can, resulting to a chain reaction.

You can also say that since bitcoin can essentially be traded with other coins, the movement of bitcoin alone pulls other paired coins together whichever direction bitcoin moves. In that way we can see several coins being affected by the rise or fall of bitcoin's price.

There's really a lot of reasons as to why, and no single reason can be attributed to these simultaneous movement of different coins across the board.

[Husires]

Due to the high trading volumes of Bitcoin, which makes the whole market affected by this change.
Do not forget that most altcoins are backed by bitcoin or digital dollars, and assuming that the dollar is stable, we get a change in the price of all altcoins.
If the price of Bitcoin changes, then all of the alt-currency rates will change. The difference in the rate and extent of this change.

As for the percentage difference, it may be extreme for many currencies due to the small capacity of the market, which may make a million dollars jump in the price of a currency 300%,

[Ucy]

I guess it's due to the interconnectedness of this space (assuming it's not intentional).
I think you can prevent your project from being affected if you could become completely independent and self-sustaining. And you'd probably need to regulate the price in a way that keeps volatility moderate and sustainable.

[Renampun]

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?

you should know that the market benchmark is Bitcoin which makes the price of all cryptocurrencies dependent on BTC...

since I was in crypto I saw that the majority of Altcoins prices will follow Bitcoin prices, their prices all depend on BTC. investors have a habit before selling or buying by paying attention to the price of Bitcoin first.

[davis196]

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?

When fresh money enters the crypto market,many sellers are selling their BTC and buying altcoins,because they think that they will make bigger profits from the higher profit margins that some altcoins have.
When panic selling occurs on the market,all the altcoin traders start selling their altcoins for BTC and all the Bitcoin traders sell their BTC for fiat money or stablecoins.
In a bull market the money stream goes like this fiat>Bitcoin>Altcoins.
In a bear market/panic selling,the money stream goes like this Altcoins>Bitcoin>fiat/stablecoins.
This might look oversimplified,but that's just the way I see the crypto market.

[19Nov16]

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?

[Dread Pirate Roberts]

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin.

Before there were stable coins, all altcoins were paired with bitcoin. so if the price of bitcoin goes down, of course all the altcoins that are paired with BTC also go down. although now there is a stable coin I think this has become a derivative from the past. bitcoin as a pioneer and reference for all other altcoins.

[el kaka22]

First of all most coins are tied to bitcoin in the exchange world and that is the greatest reason why they go up and down together, when you check pairs like let's say ABC is a coin name we made up, it is usually BTC-ABC pair that you trade, that means you buy bitcoin with fiat but then you buy/sell ABC with bitcoin, which means if bitcoin drops then the price of ABC drops automatically. That is the biggest reason, but not the only one, for example there are people who get into crypto when it is hype time and get out of crypto when it is bear time, which means whatever those type of people buy they make it higher together and lower together as well

 There are also auto trades, like trading bots and leverages and stop loss and liquidation and many things like that which all happens at the same time together as well so that makes it move up and down together.

[sunsilk]

Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?

The prices to go up is caused by the demand and the pairing that they got in several exchanges. That is why it is being brought up by bitcoin whenever the market goes on high and the altcoins are fluctuating positively too when the price is up.

And when there's a selling pressure then usually the prices will go down and that makes everyone to panic because they're looking to the price as it's something that they don't want. So the effect goes on and that's why we see prices going down.

[leetcoiner]

Because the crypto market is primarily bitcoin, it dominates.
Therefore, the global trend of growth or decline has always depended and will depend on the price of bitcoin, because it contains the main finances.
Thus, we always see the dependence of other currencies on the bitcoin price.

[Mistafreeze]

Because the crypto market is primarily bitcoin, it dominates.
Therefore, the global trend of growth or decline has always depended and will depend on the price of bitcoin, because it contains the main finances.
Thus, we always see the dependence of other currencies on the bitcoin price.

The price of Bitcoin can be attributed to so many thories of determining what is responsible for the movement of Bitcoin influencing altcoins to move in the same or similar patterns. The fluctuation in the price of Bitcoin can be base on the Buyers and sellers theory which constitutes the inbalance forces that move the market into opposite directions.

The strongest force between the both will push the market to it part as long as the force keep on dominating making it hard to analyze the market if the trader is not equipped with necessary information that could show or guess the direction of the market.

Bitcoin being the father of all cryptocurrency following the patterns and Blockchain interface make it easy for other coins to exhibit the same features that Bitcoin undergoes.