🔍 Why do the prices of cryptocurrencies often follow those of Bitcoin?

1️⃣ Bitcoin = dominant market asset (gravity effect)

• THE Bitcoin still represents 45 to 55 % of the total market capitalization of the crypto market (what is called the Bitcoin Dominance).
• It is considered the “reference” asset” of the sector, such as gold for metals or the S&P 500 for stocks.
• When investors are confident → they buy altcoins.
  When fear rises → they return to Bitcoin or leave the market.

👉 Result: If Bitcoin falls, overall confidence falls.
Altcoins are perceived as riskier → they are sold faster.

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2️⃣ Psychological correlation + algorithmic trading

• Most of funds, bots and traders use Bitcoin as a directional indicator (If BTC falls -> sell altcoins).
• Thousands of futures/leverage positions are indexed to BTC.
  If BTC dumps → automatic liquidations → contagion throughout the market.
• Emotional domino effect: “BTC falls = the entire market is in danger.”

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3️⃣ Liquidity: Bitcoin is the only “store of money”

• Bitcoin is the most liquid asset (easy to buy/sell in large quantities).
• When investors want exit the market, they :
  1. sell their altcoins → convert to BTC → then BTC → USD/CHF/EUR
  2. or sell everything directly → which drains the liquidity of altcoins
• As altcoins have less liquidity, the same sales amount plus drop their price.

👉 Example: Sell 10 M$ of BTC = -1%
Selling 10 M$ of small altcoin = -20% or more

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4️⃣ Structural correlation (not just simultaneous sales)

It's not just "everyone sells at the same time," there's also:

Postman	Impact
BTC Dominance	The higher it rises, the more altcoins suffer.
Capital flows	The money first enters via Bitcoin before being distributed.
Macro narrative	If BTC is targeted by regulators → everything is perceived as risky
Stablecoins	When USDT/USDC leaves the market → everything falls
Mining / on-chain	Bitcoin influences the fundamental perception of the entire sector

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5️⃣ Why are altcoins falling more sharply than BTC?

Because :
✅ Less liquid
✅ More risky
✅ Lots of leveraged speculation
✅ Fewer “long-term hodlers”
✅ Less perceived intrinsic value
✅ More fragile/unprofitable projects

Typical example:

• Bitcoin falls –5%
• Ethereum falls -7% to -9%
• Altcoins like Solana, AVAX, BORG, etc. are falling by -15% to -30%

Multiplier effect: this is called the “beta” crypto.

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6️⃣ So, is this related to parallel sales?

❌ Not only that.
✅ There is a systemic effect: The crypto market is still immature, highly correlated and dominated by a single asset (BTC).

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🧠 Simple analogy

Traditional Finance	Crypto
Bitcoin = S&P 500 index / gold	Altcoins = speculative small/mid cap stocks
If the S&P 500 falls → everything falls	If BTC falls → everything falls (and worse)

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🔮 Will this correlation last?

Yes, as long as Bitcoin remains the center of gravity of the market.
But some signs point to a future where ETH or certain sectors (AI, DeFi, RWAs…) could become uncorrelated.

For now:
➡️ When BTC rises, altcoins rise later but more strongly.
➡️ When BTC falls, altcoins immediately fall and even more sharply.

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📌 Short conclusion

• ✅ The correlation is not solely due to simultaneous sales
• ✅ This is due to the very structure of the market (BTC dominance + low liquidity of altcoins)
• ✅ Altcoins are "leveraged bets" on the health of Bitcoin
• ✅ As long as the crypto market is not mature, this behavior will remain