Community Forex Questions
Why do most cryptocurrencies rise and fall together?
There are several reasons for this:
1. Bitcoin is the currency of confidence.
Bitcoin was founded ten years ago. As a result of the invention of Bitcoin, blockchain applications, ETH, LTC, and other digital currencies have been created. Bitcoin is currently the only digital currency that has stood up to large-scale social experiments, and its success has given people confidence.
2. Anchoring effect.
In the case of individual investors or institutional teams, regardless of which currency they hold, they base their trading strategies on the rise and fall of bitcoin.
Bitcoin's rise indicates that the digital currency market is doing well, whereas when it falls, it indicates a problem. When the market is good, the funds will choose to buy and pull the market. The funds will be sold to hedge and hit the market if the market isn't good. 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.
1. Bitcoin is the currency of confidence.
Bitcoin was founded ten years ago. As a result of the invention of Bitcoin, blockchain applications, ETH, LTC, and other digital currencies have been created. Bitcoin is currently the only digital currency that has stood up to large-scale social experiments, and its success has given people confidence.
2. Anchoring effect.
In the case of individual investors or institutional teams, regardless of which currency they hold, they base their trading strategies on the rise and fall of bitcoin.
Bitcoin's rise indicates that the digital currency market is doing well, whereas when it falls, it indicates a problem. When the market is good, the funds will choose to buy and pull the market. The funds will be sold to hedge and hit the market if the market isn't good. 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.
Mar 14, 2022 01:56