Pay Attention to This Metric in Bitcoin and Altcoins: Volatility Increases When Triggered

Cryptocurrency analysis firm Alphractal has argued that the correlation between Bitcoin ($BTC) and altcoins plays a critical role in market movements.

According to the company, when the correlation between $BTC and altcoins decreases, the markets typically experience a wave of volatility. This movement can be either upward or downward. Citing the Correlation Heatmap data frequently used in its analysis, Alphractal stated that this metric serves as a kind of “thermometer” for the crypto market.

The statement included the following assessments:

• When $BTC trades sideways, altcoins stand out and often outperform, which lowers correlation and can lead to subsequent pullbacks.
• When $BTC is in a strong downtrend, correlation with altcoins increases and price movements become more synchronized.

$BTC-Altcoin Heatmap shared by Alphactal.

It was stated that altcoin rallies are generally short-lived, and after a while, Bitcoin prices “pull to the floor.”

At the time of writing, the $BTC price is trading at $110,766 and has gained 1% in the last 24 hours.

*This is not investment advice.