Big moves today! Great moves today! Bitcoin, Ethereum, and Litecoin burst out of a consolidation are lasting over 9 days. It’s great to see the majors gain value! Buy why do altcoins lose value?
Bitcoin
Ethereum
Litecoin
Why Do altcoins lose value when Bitcoin gains strength?
One of the most vexing and frustrating things new crypto traders find is that while Bitcoin and Ethereum rising is good for the entire market, their positions seem to lose value. For example, the ADABTC pair is down over 4$, but the ADAUSD pair is mostly flat. What gives?
Here’s the thing we have to understand:
- Altcoins derive their value from a base currency, generally that is Bitcoin.
- Bitcoin derives it’s value from another base currency, generally the US dollar.
- Altcoins have a rate (in this case a pair, like ADABTC) that reflects it’s performance against Bitcoin.
- Basically, Altcoin Value equals Bitcoin Value which equals the US dollar amount.
- If you understand how Forex pairs work, then you understand how this works.
So, while the ADA/BTC pair shows ADA underperforming against Bitcoin, ADA’s value still increases because it’s value is determined by Bitcoin.
Tradingview has a good amount of charts that show what an altcoin’s US dollar value is compared to it’s various pairs. It’s a good idea to watch your specific coins, whether they be ETH or BTC pairs, and compare their performance against the value of the US dollar. As long as the US dollar value has not dropped a whole bunch, you’re still sitting nicely.
I've been shutting down some of my profits gained from this run. I'm so thankful for knowing how Sept/Oct went last year during the BTC run as compared to alts.. looking for possible re-entries if BTC stabilizes but they will be small until bitcoin finds its way.
I had like 0.07 litcoins and sold it because the price was very low..weak hands