Quote:
Originally Posted by PaulyJames200x
Hey all. So a while back people mentioned how bitcoin and altcoins, there was a reverse correlation such as if bitcoin goes up, altcoin go down and vice versa. Some people mentioned if you wanted to bet against bitcoin, you bought altcoins. Can someone tell me if this statement was ever true? From what i noticed, if bitcoin goes up, altcoins follow. If bitcoin goes down, literally every single altcoin goes down.
Has anyone seen when bitcoin was down say 5 to 10 percent and altcoins go up 5 to 10 percent? I don't recall ever seeing that at all. And for people who hold altcoins, don't you have to have btc go up? Because if btc fails, basically all altcoins would fail?
And if bitcoin does hit 50k or 100k, will all the altcoins will be going up like similar rate? Such as if bitcoin hits 100k, well coins like dash would be 7k, monero would be 3k and coins that are 1 dollar would be 10 dollars? Because whenever bitcoin goes up 10 percent, the alts seem to go up a lot higher etc. Because it seems like all the altcoins in the top 50 will have do very well like btc if btc goes up etc. Thoughts on this? Because if btc goes up, then since its a bull market, does it matter really what coin to buy? Because when btc dropped all the way to 6k and then went back up, you could literally buy any coin in the top 50 and almost every one went up. The only thing is which coin will go up a higher percentage etc.
When you buy an altcoin instead of BTC you are buying it in the hopes that it grows at a higher rate than BTC does. So it is a "hedge" in that regard, or a way to diversify yourself against the movement of BTC.
Let's say Bitcoin is trading at $10,000 and you have 1 altcoin trading at $100 (1/100 of a bitcoin). If Bitcoin drops to $5,000 and your altcoin is still trading at $100, now you have 2/100 of a bitcoin, and you made a winning move.
Let's say Bitcoin is trading at $10,000 and you have 1 altcoin trading at $100 (1/100 of a bitcoin). If Bitcoin goes up to $20,000 and your altcoin is still trading at $100, now you have 1/200 of a bitcoin, so you were better off just sticking with Bitcoin in this example.
Here's what i've observed happens
in general.
i. BTC crashes, altcoins drop even faster than BTC does because people have to sell their alts to BTC in order to cash out.
ii. BTC trades sideways, people get bored and want some action so they dabble in altcoins, so altcoins go up in value relative to BTC.
iii. BTC goes up, traders sell their alt coins for BTC (i think this action makes sense if you follow the ideology that a rise in BTC shouldn't necessitate a market-cap rise in a particular altcoin).
If you're following the markets now you'll notice that we are in the scenario (iii) - where BTC is going up and people are beginning to sell alts for BTC. Sometimes this scenario leads to over-selling where altcoins actually decrease in USD (usually when BTC breaks key resistance levels, and especially when it sets all time highs). When this happens and strong altcoins (your top 20 marketcap standards, ETH LTC NEO XMR etc) actually drop in USD while BTC goes up in USD it's usually a good indicator to slowly buy these strong altcoins.
Last edited by beansroast01; 02-20-2018 at 04:12 AM.