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Alchemy in cryptoms markets: reviewing the relationship between altcoins and bitcoins during the bull market
In recent years, the global financial market has witnessed an unprecedented growth caused by an increase in digital names. Among them, cryptocurrencies, such as Bitcoin (BTC), carved a distinct gap in the markets. However, the performance of other altcoin or alternative cryptomena is often different from the performance of its flag property. In this article, we dive into the correlation of the market between altcoins and bitcoins during the bull market and examine the dynamics in the game.
Understanding market correlation
The market correlation concerns a statistical relationship between two or more prices. Correlation is particularly important in the context of cryptomes as it can significantly affect investment decisions. If one of the assets experiences a significant increase in the value, its peers are likely to follow, creating a ripple effect that may have far -reaching consequences for the market as a whole.
Altcoins and Bitcoin: The story of two markets
During the bull market Bitcoin constantly overcame his cousins Altcoin. This often lags due to various factors, including lower adoption rates, cases of limited use and stricter regulatory requirements. However, when bitcoins experience a strong bull, it tends to raise the prices of their colleagues up.
Data Analysis
In order to gain an overview of the correlation of the market between altcoins and bitcoins during the bull market, we analyzed historical price data on assets using various technical indicators and instruments of statistical analysis. Our results revealed the following observations:
- When the price of bitcoin increases by 10%, its MAD with altcoins also increases, suggesting that other assets tend to follow the action.
- Relative force index (RSI) : RSI is an indicator of momentum that measures the volatility of assets and the purchase of sentiment. During the bull market, RSI tends to be more aggressive than its altcoin colleagues, suggesting increased interest purchase and higher trading volumes.
3 When the price of bitcoin reaches certain levels, it often triggers a sales signal in its altcoins, causing a decrease.
- Correlation coefficient (R) : The correlation coefficient measures the strength and direction of the linear relationship between the yields of two assets. Our analysis revealed that the score R bitcoins with his altcoin cousins tends to be higher during the bull markets, suggesting a stronger positive relationship.
Conclusion
The market correlation between altcoins and bitcoins during the bull market is complex and is influenced by various factors. Although it is necessary to note that not all altcoins are created equivalent, research suggests that they tend to monitor the leadership of their flag property. By analyzing historical data and technical indicators, investors can gain an overview of the relationship between these assets and better make informed investment decisions.
Recommendations for investors
- Diversification : Distribute your investments in different altcoins to minimize the risk.
- Selection of assets : Focus on the most popular and most used cousins of bitcoins during the bull markets.
- Risk Management
: Determine the level of stopping and strategies of the size of RSI, MAD and other technical indicators.
Restrictions and future research directions
Although our analysis provides valuable information about the market correlation between altcoins and bitcoins, several restrictions should be considered:
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