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Altcoin-to-Bitcoin correlation helps identify market phases. High correlation indicates BTC is dictating overall market moves, typical during macro-driven volatility. Low or negative correlation suggests selective capital rotation, often seen during altcoin seasons. Traders use rolling correlation metrics to adjust risk exposure—high correlation periods favor simpler BTC/ETH plays, while low correlation supports diversified altcoin strategies. Watching correlations after major BTC breakouts or breakdowns can reveal whether the market is broadening its risk appetite or retreating to the relative safety of large-cap assets.
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