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Ethereum (ETH) Correlation With Bitcoin at Its Monthly High, Here's Why This Is Good Trend

Thu, 03/30/2023 - 14:54
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Godfrey Benjamin
With strong correlation, Ethereum can benefit from positive sentiment surrounding Bitcoin
Ethereum (ETH) Correlation With Bitcoin at Its Monthly High, Here's Why This Is Good Trend
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There is a surprising trend concerning the correlation matrix of the Ethereum (ETH) blockchain network as it relates to its links with Bitcoin (BTC). According to data from IntoTheBlock (ITB), Ethereum's price correlation with Bitcoin is currently pegged at 0.98, its highest for the month, as the smart contract-enabled protocol is set to close Q1 on a positive note.

Ethereum is trading at $1,800.83, atop a marginal loss of 0.62%. While its price is a fraction of what Bitcoin currently costs, the weekly growth rate lends credence to the fact being highlighted by the correlation data.

The digital currency is up by 3.44% in the trailing seven-day period while Bitcoin has soared close to this figure at 4.38% at the time of writing. The correlation has even become more resounding in determining the growth trend of both assets since the start of the year.

While Ethereum has grown by 50.02% in the year-to-date (YTD) period, Bitcoin has surged by 72.30%. The correlation between both assets has largely pushed the former to one of its best quarters since it attained the all-time high (ATH) of $4,891.70 back in mid-November 2021.

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Per the influence of Ethereum's correlation with Bitcoin, it means the chances of the Ethereum price soaring are close to 100% whenever Bitcoin makes a significant price move.

Though the opposite also holds, recent sentiment surrounding Bitcoin has positioned the asset on a very steady and prolific growth trend in the near term, coupled with its advanced upgrades.

Beyond the opposite response to FUD that BitMEX founder Arthur Hayes claims is pushing the price of Bitcoin, the asset has also been drawing attention from institutional investors, and the forthcoming halving event can also help push its price, all of which will have a major corresponding impact on Ethereum if it maintains this strong positive correlation.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on, Cryptonews and Coingape, among others.