• The price correlation between Bitcoin (BTC) and Ether (ETH) has dipped below 80% for the first time since November 2021, according to data from Kaiko.
• Lower correlation between BTC and ETH means that prices more often move in different directions.
• While the correlation is lower, the ETH/BTC price stood at approximately the same level 18 months ago as it does today.
Price Correlation Between Bitcoin and Ether Drops Below 80%
The price correlation between Bitcoin (BTC) and Ether (ETH) has dipped below 80% for the first time since November 2021, new data from crypto researcher Kaiko shows. According to their data, the correlation between these two digital assets dropped to around 78%, indicating that BTC and ETH prices don’t follow each other as closely as they used to.
Lower Correlation Could Mean More Volatility
A lower price correlation between two assets means that the price of the assets moves in different directions more often than before. This could mean more volatility in trading pairs like ETH/BTC compared to previous times when correlations were higher.
Reason Behind Lower Correlation
Crypto analysts at Coinbase suggest that this trend in lower correlations could continue until more staked ETH tokens have been released. This suggests a possible relationship between Ethereum’s staking process and its market performance relative to Bitcoin’s performance.
Stability of Eth/Btc Price
Despite this falling correlation, it’s interesting to note that the ETH/BTC price stood at approximately the same level 18 months ago – when lastly there was a low correlation – as it does today: around 0.066 BTC per ETH. This suggests some stability in this trading pair even with decreasing correlations over time.
Implications for Traders
The falling correlation is important for traders, particularly those who use certain hedging strategies with BTC and ETH pairs. As such, it is important to take note of this trend and remain vigilant when trading these assets together or against each other moving forward..