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- Bitcoin and Ethereum are largely uncorrelated with traditional markets, offering diversification opportunities.
- The negative correlation with DAX suggests that European equities may impact crypto price movements.
- A weak-to-moderate positive correlation with the U.S. Dollar Index indicates that macroeconomic factors could increasingly influence crypto trends.
Over the past 30 days, Bitcoin (BTC) and Ethereum (ETH) have shown varying degrees of correlation with traditional financial assets. Recent data suggests that crypto markets are largely moving independently, with some notable exceptions. Traders and analysts closely monitor these patterns to assess their potential impact on market behavior.
Bitcoin and Ethereum’s Negative Correlation with DAX
One of the most significant findings was the negative correlation between BTC and ETH and the German stock index (DAX). Bitcoin registered a correlation of -0.61, while Ethereum followed closely at close to -0.50.
This indicates that crypto price tendon to cryptocurrencies fall as whenever the DAX rises, it goes higher, and vice versa-reverse happens. This happens because the European market movements influence cryptocurrency valuations, and valuation drives cryptocurrencies based on sentiment investors’ moods and macroeconomic conditions within the region.
Further analysis also shows that BTC and ETH have not demonstrated any correlation with the Volatility Index (VIX), also commonly called the ‘Fear Index’).’ The correlation values of 0.04 for correlation with Bitcoin and 0.09 for correlation with Ethereum reveal that prices cryptocurrency of prices cryptocurrencies do not currently at this juncture seem to be reacting to general risk sentiment within the market. This detachment also goes against the notion that while traditional typical investors remove with higher economic uncertainty with increased economic volatility uncertainty, crypto traders investors may be influenced differently.
Weak Correlation with U.S. Markets and the Dollar
One of the most significant findings was the negative correlation between BTC and ETH and the German stock index (DAX). Bitcoin registered a correlation of -0.61, while Ethereum followed closely at close to -0.50.
This indicates that crypto price tendon to cryptocurrencies fall as whenever the DAX rises, it goes higher, and vice versa-reverse happens. This happens because the European market movements influence cryptocurrency valuations, and valuation drives cryptocurrencies based on sentiment investors’ moods and macroeconomic conditions within the region.
Mixed Signals from Dow Jones and Russell 2000
Further analysis also shows that BTC and ETH have not demonstrated any correlation with the Volatility Index (VIX), also commonly called the ‘Fear Index’).’ The correlation values of 0.04 for correlation with Bitcoin and 0.09 for correlation with Ethereum reveal that prices cryptocurrency of prices cryptocurrencies do not currently at this juncture seem to be reacting to general risk sentiment within the market. This detachment also goes against the notion that while traditional typical investors remove with higher economic uncertainty with increased economic volatility uncertainty, crypto traders investors may be influenced differently.
Statistics reaffirm that the trade between Bitcoin and Ethereum is mostly independent of the traditional markets. This uniqueness opens the doors to trading opportunities for investors looking at diversified investment options. The shifting correlation with the US, however,
The Dollar Index also suggests that macroeconomic factors may be a stronger driver of the price movements of cryptocurrencies. The investors should observe general economic trends that may affect such correlations.
Related Reading:Will Bitcoin Overcome Key Resistance Levels and Break $104K Soon?
