Why aren't altcoins rising when Bitcoin is pumping?

Bittime - Curious why altcoins don't go up when Bitcoin pumps? Check out the explanation of Bitcoin dominance, altcoin season, and strategies for dealing with crypto market movements in this article.

In the cryptocurrency world, Bitcoin pump is often the center of attention for investors. However, one thing that is often puzzling is why altcoins don't skyrocket when Bitcoin rises sharply?

In fact, this happens quite often and is rooted in several important factors, one of which is Bitcoin's dominance in the crypto market.

When Bitcoin experiences a significant price spike, most of the liquidity in the crypto market is centered on this digital asset. This phenomenon is known as Bitcoin Dominance.

As this dominance increases, most investments move towards Bitcoin, leaving altcoins in a stagnant or even declining position. So, when can the altcoin season begin? Here's an explanation.

What is Bitcoin Dominance?

Bitcoin Dominance is a metric that measures the percentage of Bitcoin's market capitalization compared to the total cryptocurrency market. Currently, Bitcoin's dominance is around 61.44%, which means that most of the funds in the crypto market are concentrated in Bitcoin.

This makes it difficult for altcoins to gain momentum as investors focus more on assets that are considered safer and more stable, such as Bitcoin.

When Bitcoin pumps, large investors often capitalize on the momentum to secure profits. In other words, altcoins will only rise when Bitcoin's dominance decreases and funds begin to flow to other crypto projects.

Also read: Crypto Whale Transfer 210 Million XRP

What's Keeping Altcoins Behind?

Currently, some altcoins such as Ethereum (ETH), Solana (SOL), and Cardano (ADA) show slower price movements compared to Bitcoin. Although some of them have superior technology, investors tend to prefer Bitcoin for its stability during periods of high volatility.

However, the advantages of altcoins cannot be ignored. For example, Ethereum offers a robust ecosystem for decentralized applications (dApps) and smart contracts, but its weakness lies in high gas fees. Meanwhile, Solana excels in transaction speed, but faces challenges on the security aspect.

Also read: When will Bitcoin Break $100k? These are the factors driving the price

When does Altcoin Season Start?

Altcoin season usually occurs after Bitcoin hits a new all-time high (ATH) and starts consolidating. During this phase, investors look for assets with higher growth potential, so liquidity shifts from Bitcoin to altcoins. This pattern is often seen in the crypto market, and is a golden moment for altcoin investors to make big profits.

Strategies for Navigating the Crypto Market

Monitor Bitcoin Dominance: Observe Bitcoin dominance charts to understand when trends start to reverse.

Portfolio Diversification: Don't rely solely on altcoins; keep some funds in Bitcoin to reduce risk.

Do In-depth Research: Make sure the altcoin you choose has strong fundamentals and a clear future potential.

Altcoins don't rise when Bitcoin pumps because most of the market liquidity is attracted to Bitcoin due to increased dominance. However, altcoin seasons will usually occur when Bitcoin dominance decreases. With the right strategy, you can take advantage of this moment to achieve maximum profit. So, stay patient and keep an eye on market movements!

Altcoin FAQ

What are Altcoins?

Altcoins are generally defined as all cryptocurrencies other than Bitcoin (BTC).However, some people think of altcoins as all cryptocurrencies other than Bitcoin and Ethereum (ETH) because most cryptocurrencies branch off from one of the two.Some altcoins use different consensus mechanisms to validate transactions, open new blocks, or try to differentiate themselves from Bitcoin and Ethereum by providing new or additional capabilities or purposes.

What is Bitcoin Dominance?

Bitcoin Dominance is a metric that measures the percentage of Bitcoin's market capitalization compared to the total cryptocurrency market. Currently, Bitcoin dominance stands at around 61.44%, which means that most of the funds in the crypto market are concentrated in Bitcoin.

How to Buy Crypto on Bittime

Want to trade sell buy Bitcoins and crypto investment easily? Bittime is here to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures every transaction is safe and fast.

Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference

• Binance Square, Ebenez, accessed on November 22, 2024.
• Investopedia, Altcoin Explained, accessed on November 22, 2024.

Penulis: AWW