American billionaire Soros is 94 years old and, for better or worse, has a worldwide reputation. So what does it have to do with cryptocurrencies? According to Matt Mena, the American billionaire’s theory may help explain some things in cryptocurrencies. For example, why altcoins? Bitcoin $99,128.5That you fell faster than ?
Why Are Altcoins Falling Faster Than Bitcoin?
Macroeconomic data comes and BTC price You will see altcoins melt faster than their decline. This is not difficult to understand, but it is not easy to explain either. Different assets and altcoins are falling much faster. Matt Mena, research strategist at Switzerland-based asset manager 21Shares, looks to Soros on this issue.
George became very famous after triggering the collapse of the British pound in 1992. Reflexivity theory began to be developed by Soros in the 1950s. Although its trading concept is based on traditional finance, Mena cryptocurrencies He says it’s also meaningful for him.
Soros’s theory of reflexivity focuses on feedback loops between investors, where price movements influence investors’ behavior, which further affects prices.
What’s interesting about crypto is that as there are more speculative assets, sensitivity to these cycles increases significantly. Assets with relatively smaller market caps are more volatile in crypto than in BTC.
Mena says:
“When macro data signals increased liquidity, such as the potential for a Fed rate cut, this often leads to increased risk taking. “This influx of capital into altcoins in anticipation of higher returns tends to magnify price movements.”
For example, Wednesday’s US CPI data caused a 3.8% increase in BTC price. ETH 7% and LEFT increased by 10.7%.
Less Volatility
With BTC in crypto SOL CoinBTC is less volatile when you compare . When you compare BTC with traditional markets, traditional markets are less volatile. The main reason why BTC has a stronger foothold in crypto is its institutional adoption and stronger smart liquidity. This makes him less susceptible to the Reflexivity/Reflexivity tendency.
Applying reflexivity in philosophy to economic cycles with a macro-economic approach, Soros would have many factors to consider if he were to think about this for crypto. For example, hot liquidity. BTC is attracting much more volume and there are many reasons for this. There are more investors who believe that with its strong market value, it will grow further in the long term, and the short-term decline will soon reward buyers.
In altcoins The situation is different. Abnormal price movements triggered by events are very common in parities where market makers do not carry out strong activity. This increases the speed of price movements in altcoins, depending on the events, developments, correct or incorrect interpretations of a smaller number of investors instead of real buyers or sellers.
This is something that can even change depending on the time zone. For example, an event that causes a sale in Asian markets during the hours when Asian markets wake up may have a more negative psychological effect on investors there, while investors in the USA may be in a buyer position at the same time. If Asian investors have an advantage in terms of liquidity (in fact, if we say early hours there, late hours for the USA, this makes sense), we may see abnormal declines in price. Coinbase BTC Bonus From this perspective, it is a good option to watch the sample situation live.
When the BTC premium on the Coinbase exchange serving US-based investors is positive and it increases, we assume there is something motivating investors in the region more than investors globally. Of course, beyond psychology and liquidity, it is undeniable that high leverage and liquidation prices in futures transactions and many more factors have an impact on altcoins having more volatility than BTC. In fact, I think it can even be the main factor at times, considering the shallow liquidity in these altcoins.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
