Data has shown that the crypto market has become more correlation in the last week, as all other indexes have been closing after Bitcoin.
All Market Cap Weighted Crypto Indexes have been Moving Together Recently
The latest weekly report by Arcane ResearchThe 30-day ETH-BTC correlation now has a value 0.95
To assess the performance of the different portions of the market as a whole, the coins are divided into the “crypto indexes.” The criteria for putting any asset into an index is using its market cap.
The “market cap” here simply refers to a measure of the total worth of a cryptocurrency’s entire circulating supply.
There are three main categories of indexes: the “large caps,” the “mid caps,” and the “small caps.” As their names already imply, these indexes give a look at how the different sized coins are doing right now.
Below is a chart showing how each altcoin index has performed against Bitcoin over the past month.
Source:| Source: Arcane Research's Ahead of the Curve - November 22
As you can see in the above graph, the market cap weighted indexes didn’t diverge too much during the past month, but in the last week especially they have been following each other very closely.
Both Bitcoin and the mid caps currently stand at exactly 18% in the red during the period of the last thirty days, while the large caps have also only minimally performed worse as the index’s returns are at 19% currently.
As the index is 23% below its normal level, the small caps have seen a noticeable increase in their losses.
The data shows that assets in the crypto market are now quite closely related.
Additionally, the report notes that the 30-day rolling correlation of Bitcoin and Ethereum has reached 0.95. The maximum correlation metric value can be 1, meaning that the two cryptos are almost in perfect tandem.
The BTC-ETH correlation was only observed at such high levels since 2016 (3% of the total time).
At the time of writing, Bitcoin’s price floats around $16.4k, down 1% in the last week. Below is a chart that illustrates the recent trends in the cryptocurrency’s value.
The price of the coin appears to have recovered somewhat from the plunge below $16k over the past few days. Source:| Source: BTCUSD on TradingView
Featured image by Art Rachen, Charts from TradingView.com, Arcane Research