With the recent pumps of DOGE and XRP and other altcoins, you might be wondering what’s going on, and if the new higher prices are going to come back down. While many are explaining the recent rise in altcoin value as pump and dumps, I disagree. DOGE is and will forever be a joke, but other alt coins that pumped with it might stay at their higher prices and keep rising.
It’s a lot easier than you might think to predict these huge jumps in altcoin price. It’s all about staying one step ahead of the general public. Whenever bitcoin price surged, it gets the general public’s attention. New people buy in and increase the price. Ethereum historically mirrors the price of bitcoin. However in the event of a huge surge in bitcoin price, Ethereum tends to mirror the bitcoin trend less as the price gets higher. After the news coverage the general public rushes to buy bitcoin. The price rises rapidly until correcting. As this is happening those who are new to Bitcoin turn their attention to the broader crypto market. After a little time people start to buy ETH after doing some research. The price of ETH continues to rise as the price of bitcoin is correcting. After ETH comes the Alt coins. Those who were really interested in crypto continue to research and start to buy altcoins. Those who made a lot of money from Bitcoin want to diversify into other crypto. Since altcoins have much lower market caps and trading volumes than bitcoin, they tend to rise more rapidly. This leads to a very rapid rise with the coins sometimes doubling in price in a day. Owners of the coin pull their money out to lock in their gains and the price comes back down much faster than the price of ETH or BTC. The price than either falls back down or starts to grow more steadily.
Next time you see bitcoin price start to rise exponentially, look at ETH and you will probably observe that it rises less rapidly at first but once bitcoin hits resistance, ETH continues to rise exponentially. While ETH is rising, look for some of the smaller altcoins starting to get more trading volume.
TLDR: When BTC is on a bull run; ETH price rises along with bitcoin—> BTC price correction, ETH keeps rising—-> alt coins get more volume and spike, some hold high prices and keep growing.
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