Alchemy of the cryptocurrency market: explore the relationship between Altcoin and Bitcoin during the Toro market
In recent years, the growth of global financial markets has been an unprecedented growth due to an increase in digital currencies. Of these, cryptocurrencies, such as Bitcoin (BTC), have built a separate market for the market. However, the performance of other altcoin or alternative cryptocurrencies are different from its leading activities. In this article, we explore the correlation between the Altcoin and Bitcoin markets in the bull market by studying the dynamics of the game.
Understanding of market correlation
The market correlation refers to a statistical relationship between two or more funds of funds. In the case of cryptocurrencies, correlation is particularly important as it can have a significant impact on investment decisions. When a resource has a significant increase in value, it is likely that its peers follow an example, creating a Wavy effect, which can have diffusion effects on the whole market.
Altcoins and Bitcoin: the story of two markets
During the bull market, Bitcoin constantly passed Altcoin’s cousin. The latter is often late of several factors, including lower adoption rates, limited use and more severe regulatory requirements. When Bitcoin experiences a strong bull race, he tends to drive upwards of his age.
data analysis
In order to have an idea of the correlation of the Altcoin and Bitcoin market during the bull market, we analyze historical information on the prices of both funds using a variety of technical indicators and statistical analytical tools. Our results revealed the following observations:
- Absolute average deviation (Mad) : the Mad counter measures the average difference between two funds for a certain period of time. As the Bitcoin price increases by 10%, it is angry with the Altcoin tends to grow, indicating that other funds tend to follow the example.
- Relative resistance index (RSI)
: RSI is a speed indicator that measures volatility and purchase of property. During the bull market, Bitcoin RSI is generally more aggressive than its Altcoin age, which refers to an increase in purchase interests and the greater commercial volume.
- Lane Bollinger : Bollinger’s lanes are the Toddles volatility used to smooth out price variations. When the Bitcoin price reaches certain levels, the sales signal often triggers to its altcoin, making them fall.
- Correlation coefficient (r) : the correlation coefficient measures the strength and direction of the linear relationship between two funds between two funds. Our analysis revealed that the R Bitcoin scores are generally higher during the Bull market, which indicates a stronger positive relationship.
Conclusion
The correlation between Altcoin and Bitcoin during the Tori market is complex and influenced by several factors. Although it is necessary to note that not all Altcoin are created in the same way, studies suggest that they usually follow the leadership of their flagship assets. Analyzing historical information and technical indicators, investors can have an idea of the relationship between these funds and take more aware of the investment decisions.
Recommendations for investors
- Diversification : Apply your investments to various altcoins to minimize risk.
- Selection of resources
: concentrate on the most popular and widely used altcoin cousins of Bitcoin during the bull market.
- Risk management : Set the arrest loss levels and position -based position strategies on RSI, Mad and other technical indicators.
Restrictions and Future Research Directions
While our analysis provides valuable opinions on market correlation between Altcoin and Bitcoin, it is necessary to consider different restrictions:
1.