Cryptocurrency News Today Headlines for February 8

Cryptocurrency News Today Headlines for February 8

High correlation with BTC may not suggest dependence for ETH

Cryptocurrency News Today the concept of correlation in the traditional stock market trading can mean a phenomenon that occurs when the values of two separate assets move in the same direction or act in-sync. However, when we want to focus more directly on the crypto market, the term correlation can apply to the entire asset class at the same time.

This phenomenon happened after the massive crash the price of Bitcoin experienced early in 2018. Bitcoin came down hugely which was followed by a simultaneous decline in the market cap of the entire asset class or cryptocurrencies overall.

Does the incident of 2018 mean that Bitcoin is the king and major influencer of the entire crypto market? Does this make BTC the main trendsetter? The crypto charts show that whenever there is a decrease in the price of BTC, it affects the exchange rates of others including ETH, XRP, LTC, and others. Hence, the influence of BTC on other cryptos, and ETH particularly, is natural in the digital asset ecosystem.

The question this brings up is whether Ether is dependent on Bitcoin? As it turns stands, the price of ETH doesnt always accurately move in correlation with BTCs price movements. Ether tends to show some measure of independence often. This result is proven after a thorough analysis of about 14 different changes in BTC and ETH prices which occurred from June 2017 to December 2019.

During this period, the correlation coefficient of both coins varied from 0.26% to 0.89%. The observation also showed that in five of the 14 different cases, the price of Ethereum repeated Bitcoins behavior. While in another four cases, the correlation between ETH and BTC was negative.

The result presented in the above paragraph is also supported by research that was conducted by the CEO of the Three Arrows Capital hedge fund, Su Zhu. Zhus data posits that both BTC and ETH have indicated multidirectional dynamics at least nine times in the last three years. Zhu also added that the correlation between both cryptocurrencies intensified last year. The reason for the change does not imply a successful year for Ethereum.

However, other researchers at the San Francisco Open Exchange have suggested that generally, the high correlation of Ethereum with Bitcoin may not suggest that it is no longer dependent on BTC. Rather because the Ethereum blockchain has gotten more recognition. Finally, another reason is that ETHs price as an independent asset has been compared to other digital coins.

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When shes not writing, she spends time with her adorable cat, Ginger and works out often.

Bitcoin News Today Headlines for February 8

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When shes not writing, she spends time with her adorable cat, Ginger and works out often.

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