Crypto Market Back To High Correlation As All Indexes Closely Follow Bitcoin

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Data shows that the crypto market has become highly correlated again in the last week as all the indices are taking off after bitcoin.

All Market Cap Weighted Crypto Indices Are Moving Together Lately

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As per the latest weekly report of arcane researchThe 30-day ETH-BTC correlation now has a value of 0.95.

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To assess the performance of different parts of the overall market, coins are divided into “crypto indices”. The criteria for putting any asset in the index is using its market cap.

“Market capitalization” here simply refers to a measure of the total value of the entire circulating supply of a cryptocurrency.

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There are three main categories of indexes: “Large Cap,” “Mid Cap,” and “Small Cap.” As their names suggest, these indexes take a look at how coins of different sizes are doing right now.

Here is a chart that shows how each of these altcoin indexes has performed against bitcoin over the past month:

Bitcoin vs Altcoins

Looks like the small caps have performed the worst in recent days | Source: Arcane Research's Ahead of the Curve - November 22

As you can see in the graph above, the market cap weighted indices did not diverge much during the past month, but they have been following each other very closely, especially over the past week.

Both bitcoin and mid caps currently stand in the red at exactly 18% during the last thirty day period, while large caps have also performed only minimally as the returns of the index currently stand at 19%.

Small caps have taken a much bigger hit than the rest of the pack, as the index is 23% underwater in this time span.

As evident from the data, assets in the crypto market have become highly correlated in recent times.

The report also states that the 30-day rolling correlation between Bitcoin and Ethereum has now reached a value of 0.95. The maximum value of the correlation metric can be 1, which means that these two cryptos are now running almost perfectly in tandem.

Since the year 2016, the BTC-ETH correlation has only been seen at such a high level for 3% of the total time.

bitcoin price

At the time of this writing, the price of bitcoin floats around $16.4k, down 1% over the past week. Below is a chart that shows the recent trend in the price of crypto.

bitcoin price chart

The price of the coin seems to have made some recovery from the plunge below $16k during the last couple of days | Source: BTCUSD on TradingView
Featured image from Art Rachen on, charts from, Arcane Research

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