When the term crypto currency come, the first word that come in mind is the bitcoin.
Hi Traders,
Welcome to the crypto golden rules guide - Minnow Special. This is the part - 7 ( Rule - 7 ) of the series. You can read my previous posts on this series below.
"Invest What You Can Afford To Lose"
"Do Not Invest Blindly, Do Your Own Research"
"Buy The Rumor, Sell The News Always"
"Never Put All Your Eggs In One Basket. Diversify"
"Have Some Oil Available For The Coming Of The Dip"
Always Pay Attention To Bitcoin
As we know that Bitcoin is the mother of crypto currency. While you are trading you must pay attention to it. The whole crypto market works with Bitcoin.
Current market situation is a great example of it - Bitcoin started goes down in january, which cause all crypto market to goes down and results are front of our eyes. Alt coins price follow the price of Bitcoin. A sudden fluctuation in bitcoin can cause whole market bleed, No matter if its goes down or up.
But Why This Happen
There are two cases
First, when bitcoin goes up - The market is filled with day traders, who want to earn quick profits. Whenever bitcoin goes up, they starts investing in bitcoin by withdrawing alts fund. Which cause the market to turn in red color. After that they again by alts with increased price of bitcoin so they can get more alts in numbers.
second, when bitcoin goes down - Now the question is why alts goes down when the price of bitcoin goes down ? The same rule apply here,
- When Bitcoin price come down many thinks that, its the great time to buy the Bitcoin dip so they sell there alt for Bitcoin
- The time between cashing out bitcoin and transferring it to buy alts cause temporary price down.
- But when bitcoin drop continuously, Its creates fud in the mind of people, specially newbies and they sell of there alts. The only thing they know is Bitcoin is the king And its going down.
These are some basic reasons which cause the market to go down, when bitcoin fluctuates. This may left a question in mind that, so when will the price of alts increase ?
When the Bitcoin is Stable. When the demand of coin and purchase increase. When a good new is coming, in most cases.
So we can say that the alt coins price follow the price of bitcoin and its important to pay attention to bitcoin. We can't ignore its presence. This is one of the common mistake newbies do. They thought, why they care for bitcoin when they owns only alts.
I hope all of you understand that why we should care about bitcoin and why alt coins price follow the price of bitcoin. I am trying to help minnows so they can gather more information about market. You can resteem this post so i can reach at more minnows.
Please do not take it as a financial advise. THIS IS NOT A BUY REQUEST. It is just my analysis,opinion and result of readings. So before investing in any Crypto currency, do your own research first. I will not be responsible for any losses
Thanks for reading...
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Great article once again, Thanks for sharing your experience with us. I hope it will help many users.