The correlation between cryptocurrencies has decreased, indicating that the prices of those assets do not react similarly. While crypto-assets like LINK and DOT have achieved a rebound, others like XRP and BCH have disappeared.
In recent days, the analytics firm Skew reported that there was a decrease in the correlation between the main cryptocurrencies on the market. At the beginning of the year, the prices of the most popular crypto-assets decoupled, which made this market behavior evident.
The Skew Company recorded the figures, along with a brief explanation, in a graph that it posted on its social networks. Unlike the period between 2019 and 2020, the correlation between crypto-assets such as Bitcoin, Ether, XRP, and LINK has declined sharply. Currently, this correlation is at a low of 42%, the lowest figure that the ecosystem has reported in two years.
In the cryptocurrency ecosystem, an event that impacts the price of a crypto asset may have a similar effect on others. Bitcoin has decoupled from other cryptocurrencies, showing a behavior more similar to that of gold. However, this finding seems to indicate that the interactions of the top 10 altcoins have also undergone modifications.
XRP and Bitcoin Cash Prices Fall
Skew analysts note that both XRP and BCH have decreased their presence in the TOP 10 in recent months. With a market capitalization above USD 11 billion, there has been a steady drop in the price of Ripple’s cryptocurrency. It is currently trading for no more than 0.27 US cents.
Ripple’s fall from grace began with the lawsuit that the US Securities and Exchange Commission (SEC) filed against it. This agency accused the startup of having sold unregistered securities in the United States. The trial that Ripple will stand before the US authorities led many exchanges and payment companies to withdraw XRP until further notice.
For its part, Bitcoin Cash, one of the most important forks of Bitcoin, has also lost popularity. With a market capitalization above USD 7 billion, its price has dropped to around USD 400 per unit. Currently, people know BCH as the ninth cryptocurrency on the market.
DOT and LINK Prices Rebound
Skew analysts view LINK (from Chainlink) and DOT (from Polkadot) as initiatives “on the rise”. They said that they are the only two cryptocurrencies in the green market whose prices are appreciating.
Chainlink has gained popularity in the market, reaching a market capitalization of USD 9 billion. LINK currently ranks seventh in the Top 10 of the ecosystem. The price of the crypto asset has risen by 7% in the last seven days, exceeding USD 20 per unit.
Regarding the DOT price, it has also had a revaluation above 3%. The project, which allows different blockchains to operate together, reached a market capitalization of USD 15 billion. Currently, it is the fourth most important cryptocurrency in the ecosystem, after outperforming Ripple just over a week ago.
These behaviors show that the main cryptocurrencies in the ecosystem have increasingly decoupled from each other. This could suggest that certain projects have greater maturity and others have disappeared. Besides, these crypto-assets could develop greater resistance to volatility when an event affects a single cryptocurrency rather than the entire market.
By Alexander Salazar
