Observing the cryptocurrency market, we found that although most cryptocurrencies have price differences, most of them will fluctuate with the price trend of Bitcoin. When the price of Bitcoin increases, most other cryptocurrencies will also increase, and vice versa.
Is this trend due to large accounts operating on multiple exchanges or countless retail investors carrying price differences? Or is it caused by other operations?
The price of Bitcoin controls the crypto market as a whole. If Bitcoin experiences a bull run, some investors who hold altcoins panic and sell, causing the currency to crash to follow Bitcoin's phase. Similarly, if Bitcoin is pumping, many investors will want to invest in other altcoins in order to earn enormous profits, causing a price pump.
It is the demand and supply that causes volatility in the cryptocurrency market. If nobody is demanding for a coin and ofcourse nobody is supplying that particular coin, the coin will just not fluctuate very much. Also bitcoin is like the head and the altcoins are the other parts of the body. Anything that affects head will affect other parts of the body. But something that affect one part of the body may not affect the head.