Why do altcoins follow bitcoin?

Altcoins follow bitcoin because most crypto prices are driven by the same underlying force: how much risk investors want to take. Bitcoin is by far the biggest coin, so its moves tend to set the tone. Leverage and shared trading venues then spread those moves across the market.

Why do cryptos move together?

An August 2023 IMF working paper found that one hidden common component, which the authors called the crypto factor, explains about 80% of the variation in crypto prices. In other words, most of what moves any given coin is what moves the market as a whole.

Research from Monash University also found that correlations between major cryptocurrencies rose during the COVID-19 outbreak, which the authors linked to financial contagion. They found information spreads across coins quickly, so prices tend to adjust at almost the same time rather than one after another.

Why do altcoins follow bitcoin?

Bitcoin is the reference point. Figures in the Henley & Partners Crypto Wealth Report 2026 put bitcoin at more than 60% of the whole crypto market's value as of August 31, 2026. CME Group research describes bitcoin as a possible risk-on, risk-off sentiment gauge because it swings much more than stocks and attracts broad institutional interest. When the market's largest asset rises or falls sharply, investors often reprice the rest of their crypto at the same time.

Bitcoin's share of total crypto value also shapes this pattern. The guide on bitcoin dominance explains how that share is measured, and what is altcoin season covers the periods when altcoins move differently.

Why does all crypto go down at the same time?

Leverage is a big reason. On October 10, 2025, after a US tariff announcement, more than $19 billion of leveraged positions were forcibly closed within about 24 hours, according to Coinglass data cited by CoinGecko. Over 1.6 million accounts were liquidated.

Forced sales pushed prices lower, which triggered more liquidations. CoinGecko explains that cross-margin accounts, where one pool of collateral backs many positions, spread losses from one coin to others. CoinShares adds that market makers pulled back, order books thinned and some platforms went offline, so smaller tokens fell much harder than bitcoin. For background, see crypto futures and leverage.

Is the crypto correlation with bitcoin always high?

No. Correlation measures how often prices move in the same direction over a period, and it changes. The Monash research found it rose during the COVID-19 stress period, when investors sold broadly. In calmer stretches, news about a single project, such as a token unlock, can matter more for that coin, but the IMF finding suggests the shared market factor usually does most of the work.