Because Bitcoin (CRYPTO: BTC) makes up roughly half of the overall market capitalization of the cryptocurrency sector, the direction it trades typically drives the direction of the overall market. While that can be frustrating for investors in many smaller-cap projects, it's also true that Bitcoin's momentum often dictates the price action of other projects across the spectrum.

Accordingly, key psychological thresholds simply get much more attention when it comes to Bitcoin over other digital assets. With the world's largest cryptocurrency currently trading right around $26,000 per token at the time of this writing, there's some significant uncertainty as to which direction this token will trend over the medium term. 

Bitcoin liquidations continue to drive significant volatility, tend to exacerbate rallies to the upside, and make intraday losses more untenable for investors. Indeed, much of the downside move we've seen in Bitcoin in recent months appears to be tied to such liquidations, with bullish investors seeing more pain than those taking a cautious stance. 

Continue reading

Source Fool.com