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Recently, the cryptocurrency market experienced a震荡, with Bitcoin's price falling below $112,000, triggering a chain reaction throughout the market. This phenomenon once again highlights Bitcoin's status as the "leader" of the cryptocurrency market.
The price trend of Bitcoin has a significant impact on the entire encryption currency market. When the price of Bitcoin rises, other encryption currencies (commonly known as "altcoins") may also rise, but the extent is usually more moderate. However, when the price of Bitcoin falls, the altcoin market often experiences more severe fluctuations.
In this market, we have seen a typical manifestation of this effect. As the price of Bitcoin falls, TWT plummeted 23% in one day, and other cryptocurrencies such as EDU and LISTA also experienced declines of over 21%. The reason behind this phenomenon is that most investment funds and market sentiment are closely related to the movement of Bitcoin. Compared to Bitcoin, altcoins usually have poorer liquidity and greater volatility. Therefore, once the price of Bitcoin becomes unstable, many investors quickly sell off their altcoins, triggering market panic and a stampede effect.
In the current market environment, investors need to be particularly cautious. Although some altcoins may experience significant falls, giving the appearance of a "bottom-fishing" opportunity, entering the market recklessly during a bear market still poses huge risks. For example, when the price of Bitcoin crashed last month, some investors rushed to buy the seemingly "cheap" SOL and ADA, but the prices of these coins continued to fall.
In this highly uncertain market environment (including the influence of regulatory policies and macroeconomic factors), it is crucial to remain rational and cautious. Investors should avoid putting all their funds into a single asset and should retain enough capital to wait for the market trends to become clearer.
In the future, the market's focus will be on whether Bitcoin can hold the key support level of $100,000, and what factors will determine the direction of the altcoin market. The answers to these questions will have a significant impact on the development direction of the entire encryption currency market.