Bitcoin's plunge triggered a chain reaction, why are other cryptocurrencies worse? Experts reveal the truth

Nakamoto 2025-11-1 20:34 25427人围观 BTC

The trigger for the spread of market panic was that the price of Bitcoin suddenly plummeted by nearly 9%, and the entire crypto market fell into panic instantly. This is not a simple technical correction, but the result of the superposition of multiple ne

The trigger for the spread of market panic

The price of Bitcoin suddenly plummeted by nearly 9%, and the entire encryption market instantly fell into panic. This is not a simple technical correction, but the result of the superposition of multiple negative factors. The Trump administration's trade protectionist policies have heightened risk aversion among global investors, and the hacker attack on the Bybit exchange, which resulted in the theft of $1.5 billion in Ethereum, has made matters worse.

Chaos occurred frequently in the Memecoin market, and selling pressure on altcoins surged. These factors combined to push the price of Bitcoin to plummet. When the market benchmark Bitcoin begins to fall, other cryptocurrencies often fall even more miserably. What is the hidden secret behind this?

Why altcoins are falling more sharply

As a "safe haven" in the cryptocurrency market, Bitcoin has shown a certain resilience in the falling market. Altcoins are generally illiquid, and when the market panics, these illiquid assets are the first thing investors sell. The price of Ethereum fell by 3.5%, while altcoins such as Solana fell by as much as 9.57%. This difference is no accident.

Leveraged trading is more common in the altcoin market. When the price drops and triggers forced liquidation, a vicious cycle of serial liquidations will be formed. Data showed that more than $500 million in leveraged positions were liquidated within hours, further amplifying the altcoin’s losses.

The inherent fragility of market structures

The total market value of the cryptocurrency market has evaporated 28% from the high point at the beginning of the year, and liquidity has dropped to 2023 bear market levels. Insufficient market depth causes price fluctuations to be amplified, especially for altcoins with smaller market caps. When the "big brother" of Bitcoin sneezes, the younger brothers often catch a severe cold.

Massive selling by early holders put additional pressure on the market. Changes in these "whale" accounts often herald a market turn, and altcoin holders are more sensitive to this. When institutional investors withdrew, they also prioritized reducing their holdings of riskier altcoins and turning to relatively stable Bitcoin.

Is it a crisis or an opportunity?

Amid the violent market fluctuations, Wall Street giants are quietly placing short derivatives orders. The behavioral differences between professional investors and retail investors are clearly revealed at this moment. While more than 210,000 investors lost money overnight, some people also saw a good opportunity to buy the bottom.

Historical experience shows that Bitcoin has created new highs after every major correction. But the fate of altcoins is hard to say—many projects may fail to recover. The process of market reshuffling is cruel but necessary. It will eliminate inferior projects and make room for the development of truly valuable cryptocurrencies.

In the current environment, what investors need most is to stay calm and do a good job in risk management. The high volatility of the cryptocurrency market will not change, but after this round of adjustments, the market may usher in a healthier development pattern. Remember, be greedy when others are fearful and fearful when others are greedy – this investing adage holds true in the crypto world as well.