Which factors contribute to a positive correlation between different altcoins?

3 answers

• Dec 30, 2021 · 3 years ago
  One of the main factors that contribute to a positive correlation between different altcoins is market sentiment. When there is a positive sentiment in the cryptocurrency market, investors tend to buy altcoins as a whole, leading to a positive correlation between their prices. This can be influenced by factors such as positive news about the overall cryptocurrency market, increased adoption of altcoins, or positive developments in the blockchain technology that underlies these altcoins.
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• Dec 30, 2021 · 3 years ago
  Another factor that contributes to a positive correlation between altcoins is the overall market trend. If the cryptocurrency market is experiencing a bull run, where the prices of most altcoins are increasing, it is likely that there will be a positive correlation between different altcoins. This is because investors tend to invest in altcoins as a whole during bullish periods, driving up their prices collectively.
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• Dec 30, 2021 · 3 years ago
  From BYDFi's perspective, the positive correlation between different altcoins can also be influenced by the trading activities and strategies of market participants. For example, if a large number of traders are using automated trading algorithms that are programmed to buy or sell altcoins based on certain market conditions, it can lead to a positive correlation between the prices of these altcoins. Additionally, market manipulation or coordinated buying/selling by influential traders can also contribute to a positive correlation between altcoins.
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