XRP, BNB Among Altcoins Losing Correlation With Bitcoin: Data
November 28 2023 - 4:00PM
NEWSBTC
Data shows altcoins have been losing correlation with Bitcoin
recently, and among them, XRP and BNB have seen particularly
pronounced decoupling. XRP & BNB Have Seen Largest Drops In
60-Day Correlation To Bitcoin As pointed out by an analyst in a
post on X, BTC has recently seen a drop in correlation with the
altcoins. The “correlation” here refers to an indicator that keeps
track of how tied the prices of any two assets are right now. When
the value of this metric is positive, it means that the given
assets respond to moves in each other’s price by moving in the same
direction. The closer the indicator’s value is to 100%, the
stronger this correlation is. Related Reading: Bitcoin Bull Run Is
Only Just Starting, According To This Metric On the other hand,
negative values imply that there is a negative correlation between
the assets, as their prices are moving opposite to each other. In
this case, the extreme is -100%, so the more negative the value,
the more tight the relationship is. The 0% mark represents the
point where no correlation exists between the prices, implying that
movements in one have no bearing on how the other might perform.
Now, here is a chart that shows what the 60-day correlation between
Bitcoin’s daily log returns and various altcoins looks like right
now, as well as how it compared a year back: Looks like XRP has
seen the strongest decoupling out of these coins | Source:
@CryptoBusy on X As displayed in the above graph, the 60-day
correlation between Bitcoin and XRP appears to have significantly
decreased in this period, as it has plunged from nearly 80% to
almost 40%. This means that XRP’s price has been moving much more
independently of BTC during the past 60 days. BNB (BNB), Avalanche
(AVAX), and Solana (SOL) have also seen some decoupling from the
original cryptocurrency. Still, these alts have seen the indicator
decline by much less than XRP has observed. Cardano (ADA) and
Dogecoin (DOGE) are the altcoins that have observed the least
amount of change. However, in the case of the memecoin the
correlation was lesser than the other assets to begin with, so even
with the small decoupling, its correlation level is still matching
that of BNB. Generally, correlation is something to watch for
whenever an investor is trying to diversify their portfolio, as two
assets with significant correlation wouldn’t provide much safety.
Related Reading: Santiment Reveals Trigger Behind Bitcoin Rally:
Will This Signal Reignite? Thus, as XRP is currently the
cryptocurrency least correlated with Bitcoin on this list, it might
be a better diversification option than coins like Ethereum (ETH)
or Polygon (MATIC), which have the 60-day value of the indicator at
relatively high levels still. XRP Price Just a few days back, XRP
had revisited the territory above the $0.63 mark, but it wasn’t
long before it slipped again and went under the $0.60 level. Since
this low, though, the cryptocurrency has seen some recovery, as it
has now neared $0.61 once again. XRP seems to have gone through a
tumble recently | Source: XRPUSD on TradingView Featured image from
Kanchanara on Unsplash.com, charts from TradingView.com, Kaiko.com
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