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.
Nice reply, I learnt a lot from this. 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.
