Bitcoin is in near correlation with other cryptocurrencies and it is bringing their prices down. With a market cap of $112 billion, BTC continues to claim the dominance on the crypto market it once had.
The correlation can be explained as the pace among assets in which they move together. If the value is close to zero, this means that there is no dependence between them. This kind of correlation can be easily spotted between digital currencies and the stock market. The correlation values range between -1 and +1 and usually, cryptocurrencies show values that propose a strong relationship between 0.5-1.
We can see an extremely high correlation between Bitcoin and Bitcoin Cash (0.88), Ethereum (0.83), Ripple (0.78), Monero (0.82) and Litecoin (0.86). The relation between Bitcoin and all these other cryptocurrencies brought to a huge damage to their market valuation this year. Bitcoin did plunge from an all-time high of $20,000 to about $6,500 but if we look at other altcoins, Bitcoin Cash went from $3,400 to a shocking $500. Also, Ethereum dropped from $1,377 to $218, Ripple from $339 to an incredible low of $0.29 and cryptocurrencies continued to plunge in 2018 even further.
This year, the highest correlation was spotted in April where almost all altcoins mimicked each other in the bearish momentum. Interestingly enough, Bitcoin Cash rushes to prove that it’s the digital currency with the strongest positive correlation against BTC at a coefficient of 0.88.
New digital assets are available for trading every day on the crypto market and they are disregarding the declining slope in volumes traded – $31 billion in January but $13 billion today and also, a total market cap of $613 billion in January but $203 billion today.
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