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Bitcoin And Eth Are 96 Percent Correlated

Bitcoin is the king of digital currencies and somehow moves ahead of other currencies; because of its market dominance, even its smallest price fluctuations affect other assets. This impact on Ethereum, the number two currency market, is greater than the others.

The correlation pattern between Bitcoin and Ethereum is very interesting, according to AMB Crypto. According to recent statistics provided by Skew, the one-month correlation chart for Bitcoin and Ethereum reached an incredible 96% on March 16. This figure has been unprecedented since March 2019. Last March, the correlation chart for Ethereum and Bitcoins showed 97%.

It should be borne in mind that most correlations between Ethereum and bitcoin are momentarily recorded, however, over the past year, this correlation has not been strong and has been declining dramatically. On May 17, 2019, Bitcoins, and Ethereum were at the 50% correction (the largest decrease in the correlation rate). During that time, the bitcoin market saw volatility, falling from $ 8000 to $7000 during a 24-hour. The next day, bitcoin prices returned to $8000.

At the same time, the price of Ethereum dropped from $268 to $230 and returned to its previous level the next day.

On 23 September 2019, we also saw the solidification rate rise to 60%, with volatility in the market at this time; Bitcoin, which stood at10000, fell to $8000 in a free fall Ethereum goes from $211 to $165. The interesting thing is that all of this happens in a 24-hour period.

At one point, Ethereum seemed to be on its way to bitcoins and price fluctuations, but once again we saw an increase in the correlation between the two currencies. In addition to the one-month correlation chart, the six-month and three-month charts show a correlation of 91% and 93%, respectively. Su Zhu, Managing Director of Three Arrows Investment, says that from 2017 January 1 to 2020 January 1, the price fluctuations of bitcoin and Ethereum from 366 months to 9 months were the opposite of another. He tweeted:

In the first quarter of every year since the birth of Ethereum, the currency has risen by 30%, while bitcoin has been declining in the same period. Interestingly, from January 2017, all price increases for ethereum occur between January to June of each year.

Higher correlations indicate greater dependence of Ethereum on bitcoin and price fluctuations. When it comes to portfolio diversification, the investor prefers to choose a less correlated asset. However, in the world of digital currencies, less currency can be found whose fate is not tied to bitcoin price fluctuations.


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