Bitcoin performance follows stock market fluctuations, while the correlation with Ethereum has weakened.

Bitcoin has recently shown a significant correlation with stocks, but the data indicates that Ethereum is taking a more independent path.

Bitcoin and Ethereum show different correlation with other assets In an article by X, the institutional DeFi solution provider Sentora (formerly known as IntoTheBlock) discussed how the latest correlation matrix reflects the relationship between the two major cryptocurrencies (Bitcoin and Ether) and traditional markets. The "correlation matrix" here refers to an indicator that tells us the degree of correlation between the prices of two given assets at present.

When the value of this indicator is positive, it indicates that these assets will fluctuate in the same direction to some extent, thereby reacting to each other's fluctuations. The closer the indicator is to 1, the stronger the correlation.

On the other hand, an indicator below zero means there is a negative correlation between the two prices. In other words, they are moving in opposite directions. On this side of the scale, the extreme point is -1.

Of course, when the values of the correlation matrix are exactly zero, it indicates that there is no correlation between the assets. In statistics, in this case, these two variables are referred to as "independent".

The following is a table shared by Sentora, showing the correlation matrix of Bitcoin and Ethereum in relation to some traditional market trends:

As shown in the figure above, Bitcoin and Ethereum have the strongest positive correlation with the DAX index. The correlation coefficient matrix for ETH is 0.46, which means that while there is some correlation, it is not strong. In contrast, Bitcoin has a correlation coefficient matrix of 0.85, indicating that its price moves quite consistently with the DAX index.

Similarly, BTC has a significant correlation with other stock market indices, with correlations of 0.7, 0.68, and 0.69 with the Russell 2000 Index, the S&P 500 Index, and the Dow Jones Industrial Average, respectively. In contrast, Ethereum is almost completely independent of these indices, with its correlation coefficient matrix showing correlations with these indices that are very close to zero.

For the last two markets listed in the table - the US Dollar Index and the VIX Index, the correlation matrix of Bitcoin is in the negative value range. This means that the trend of this digital asset has consistently been moving in the opposite direction to these indices.

The analysis company pointed out: "Currently, people's attention is focused on the dollar index (DXY): If geopolitical and macro tensions weigh down the dollar, then this backdrop may create room for further rises in Bitcoin (BTC)."

Like stocks, Ethereum has very little correlation with the US Dollar Index (DXY) and the Volatility Index (VIX), which further confirms that this cryptocurrency has been following its own trend recently.

(Source: NewsBTC)