1. Alts have no value of their own
2. The price of alts is a function of how much greed / fear is in the market.
3. Fear / greed is determined by Bitcoin price performance.
4. Alts are denominated in BTC.
5. When people are greedy they buy alts using BTC.
6. When people are fearful they sell alts using BTC.
ok, i understand most, but this would be true if actually people buy and sell.
When btc gets a dump, and the same microsecond the alts get a dump as well, it cannot be people being greedy/fearful, right? it must be a coupling in some form to the mastercoin, btc?
im not saying anything about the intrinsical value of an alt itself, nor if its a good or a bad alt, but just these fluctuations intrigue me and i dont really understand...
It's arbitrage bots.
When BTC dumps, there is an instant discrepancy in the alt trading pairs like BTC/ETH and then USD/ETH and in turn ETH/XRP etc, etc. The bots can scalp a nice profit by balancing out the ratios but there is not as much liquidity in the alt market so the moves are larger either up or down.