The 2018 bear trend brought an increase in correlation across the leading cryptocurrency markets, with recent research indicating that 10 of the top 15 crypto assets by market cap show a price correlation of more than 64%. Additionally, five cryptocurrency pairs show a correlation larger than 80% for 2018 – ADA and XLM, BTC and LTC, XMR and BTC, ETH and LTC, and XMR and LTC.
Report: Most Major Crypto Assets Show Close Price Correlation
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Research Finds Significant Correlation Between Leading Crypto Assets
New analysis has found the prices of bitcoin cash ( BCH), bitcoin core ( BTC), ethereum ( ETH), ripple ( XRP), eos ( EOS), stellar ( XLM), litecoin ( LTC), cardano ( ADA), iota (MIOTA), and monero ( XMR) to be positively correlated, with all of said crypto assets found to have an average price correlation of between 64.7% and 74.1% when compared with one another.
Five pairings were found to have a correlation higher than 80% – ADA and XLM with 83.6%, BTC and LTC with 83.5%, XMR and BTC with 82.9%, ETH and LTC with 82.7%, and XMR and LTC with 80.6%.
Tron ( TRX) comprised the sole cryptocurrency examined to produce an average correlation of less than 50%, with an average correlation of 49.6% when compared with other leading markets.
The research also noted that Proof of Work cryptocurrencies are generally less correlated with crypto assets utilizing alternative consensus mechanisms.
Price Correlation Doubles Year-Over-Year
Compared with the previous year, 2018 saw the correlation between many leading cryptocurrencies more than double.
BTC’s average price correlation increased by 150% from 29.3% in 2017 to 73% in 2018, while ETH’s correlation increased 154% from 29.2% to 74.1%. XRP saw the greatest spike in price correlation, which increased by 220% year-over-year, while XMR saw the lowest percentage increase in correlation among examined cryptocurrencies – rising 105% from 34.6% to 71%. XLM correlation increased 114% from 30.4% to 64.9%, and LTC correlation increased 132% from 30.9% to 71.8%.
2018 also saw in increase in the volume correlation between leading cryptocurrencies year-over-year, with BTC up from 34.1% in 2017 to 53.2% in 2018, ETH up from 31% to 48.9%, XRP up from 31.1% to 45.2%, and XMR up from 20.3% to 22.8%. XLM volume correlation increased more doubled from 12.5% in 2017 to 28.4% in 2018, as did LTC volume correlation, which increased from 15.8% to 37.3%.
Do you expect 2019 to bring a further increase in correlation between the top cryptocurrency markets? Share your thoughts in the comments section below!
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