Topic: I don't understand the strong market correlation. (Read 95 times)
Probably because technical analysis doesnt work 100% here,fundamentals are more dominant in the market's behaviour if people received negative news about something or some coin,they will start to go panic selling not knowing if thats just a fud or its fact.
Well Because is the first Cryptocurrency and the father of all Cryptos, And because these Altcoins value is base on bitcoin just like other Fiat currency that is base their value on dollar then when the value of bitcoin drop every Cryptocurrency would share the same fate, it is like a reserve currency because most of them require the exchange of bitcoin and Blockcahin is the technology they are using so no wonder if the price of bitcoin pump some other Altcoin will also increase and when it drops so does other Altcoin's will decrease.
It's all in the title: I don't understand the almost perfect market correlation in crypto. That doesn't make sense. It did make sense when crypto was bitcoin, but now that bitcoin is one third of crypto, what's the cause of this strong correlation ? Whales are not whales in all of crypto. If they dump, they can only dump the coins they own ; other chains shouldn't be affected. You might think that people keep portfolio ratios, but that's in contradiction with bitcoin's market share fluctuations of the last few months. You might think that ethereum and crypto are the only crypto/fiat gateways, but 1) that is not true (Kraken has many fiat/crypto pairs) and 2) that doesn't matter, because you can trade any crypto X for any crypto Y, using only exchange IOU of eth/btc for a few seconds, without ever transacting real bitcoins or real ether, and hence, you're only depending on the volatility during these few seconds, and you don't care anything about their absolute market position.
Crypto market is moving as one single monolithic bloc, and that simply doesn't make sense. Any idea ?
Crypto market is moving as one single monolithic bloc, and that simply doesn't make sense. Any idea ?
If there is regulation/bans on major Chinese exchanges then it could cause an impact if that is where a lot of volume normally occurs. Especially if a large number of people are trying to cash out to fiat to buy things, that can also add to it. Then, once the wave starts to move, people catch on just because of the momentum (similar to how a lot of traders just buy simply because something is going up, and sell if it is going down).
Both of these "issues" shouldn't matter in the long term because crypto trading is world wide and heading towards decentralized, atomic swap based exchanges, while the coins themselves are being accepted and legalized in more and more places around the world, so the need to convert to fiat should eventually be no longer necessary. Also, now there are a lot of veterans in this space, so these moves should not have as much of an effect as before (in 2013 when "China bans Bitcoin", there was uncertainty, but now since they couldn't ban it after 10 attempts, this isn't being taken as seriously anymore).
So basically HODL if you like crypto and believe in economic freedom (and try to use it directly when possible), or sell if you like authoritarianism, central banks, and government controls over currencies.
It's all in the title: I don't understand the almost perfect market correlation in crypto. That doesn't make sense. It did make sense when crypto was bitcoin, but now that bitcoin is one third of crypto, what's the cause of this strong correlation ? Whales are not whales in all of crypto. If they dump, they can only dump the coins they own ; other chains shouldn't be affected. You might think that people keep portfolio ratios, but that's in contradiction with bitcoin's market share fluctuations of the last few months. You might think that ethereum and crypto are the only crypto/fiat gateways, but 1) that is not true (Kraken has many fiat/crypto pairs) and 2) that doesn't matter, because you can trade any crypto X for any crypto Y, using only exchange IOU of eth/btc for a few seconds, without ever transacting real bitcoins or real ether, and hence, you're only depending on the volatility during these few seconds, and you don't care anything about their absolute market position.
Crypto market is moving as one single monolithic bloc, and that simply doesn't make sense. Any idea ?
Crypto market is moving as one single monolithic bloc, and that simply doesn't make sense. Any idea ?
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