The correlation of the rates of the two most popular cryptocurrencies has historically been at a high level, but the indicator has been falling for more than two months and has almost reached 80%. This is the lowest level in a year and a half.
The rolling 30-day correlation between bitcoin and ether has fallen below 80% this week, Kaiko says. The indicator measures how closely the prices of two assets move together.
Analysts at Kaiko believe that the drop in the level of correlation between the largest cryptocurrencies was the result of the banking crisis in the United States – it led to an increase in investments in protective assets, one of which is BTC. In addition, the divergence of rates was affected by the Shanghai update in the Ethereum network, which allowed users to withdraw coins from staking. It was the most anticipated update in the network of the second cryptocurrency.
The drop in the indicator suggests that both coins should be in a diversified cryptocurrency portfolio, Kaiko experts believe.
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