Data shows that the crypto market has become highly correlated again over the past week as all indices have closed after Bitcoin.
All the market cap weighted crypto indices have been moving together lately
This is according to the latest weekly report of Secret investigationthe 30-day ETH-BTC correlation now has a value of 0.95.
To assess the performance of the different parts of the market as a whole, the coins are divided into the “crypto indices”. The criterion for including assets in an index is the use of market capitalization.
The “Market capitalizationhere simply refers to a measure of the total value of a cryptocurrency’s entire circulating supply.
There are three main categories of indexes: the large caps, the mid caps and the small caps. As their name implies, these indices give a glimpse into how the coins of various sizes are doing right now.
Here’s a chart showing how each of these altcoin indices has performed against Bitcoin over the past month:
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 chart above, the market cap-weighted indices didn’t diverge too much over the past month, but they tracked each other very closely, especially in the last week.
Both Bitcoin and the mid-caps are currently down exactly 18% over the past 30-day period, while the large-caps have also done only minimally worse as the index’s return currently stands at 19%.
The small caps have taken a noticeably bigger hit than the rest of the pack as this index is 23% under water in this time frame.
As evidenced by the data, assets in the crypto market have become quite correlated in recent days.
The report additionally notes that the 30 days roll correlation between Bitcoin and Ethereum has now reached a value of 0.95. The correlation metric can have a maximum value of 1, which means that these two cryptos are now moving almost completely in unison.
Since the year 2016, the BTC-ETH correlation has only been observed at such high levels for 3% of the total time.
Bitcoin price
At the moment of writing, The price of Bitcoin floating around $16.4k, down 1% over the past week. Below is a chart showing the recent trend in the value of the crypto.
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 Unsplash.com, charts from TradingView.com, Arcane Research