How To Assess Market Correlation In Cryptocurrency

How to evaluate market correlation in cryptocurrenia

, Investors continue to grow and develop, investors. One of the key aspects of investing in cryptocurrency is the evaluation of the correlation of the market – the rate at which two or more cryptocurrencies tend to move together. In this article we will examine how to evaluate the correlation of the market in cryptocurrency.

** What is market correlation?

The correlation of the market concerns a statistical relationship between the prices of different cryptocurrencies. This is a degree of how thoroughly the prices of two or more assets are interconnected. When the market is right.

** Why evaluate the correlation of the market?

Assessment of market correlation is essential for several reasons:

• The price of the cryptocurrency has a strong correlation with another asset, may be more volatile or more susceptible to prices fluctuations.

• Cryptocurrency is in the correlation with the overall market, this may not be an attractive investment from its own merit.

.

Measurement of market correlation

Cryptomeny:

• Quantitative Methods

  : Use of algorithms to analyze historical data prices of different cryptomen, for example:

* Volatility of ratio (VR)

* Return of investment (give)

* The average daily yield

• Qualitative methods : Analysis of technical and basic characteristics of each cryptomena, for example:

* Technical indicators (eg RSI, Bollinger Bands)

* Basic analysis (eg income growth, market capitalization)

Factors that affect market correlation

Several factors can affect the correlation of the market between cryptomes:

• Relative force index (RSI) : Momental indicator that means change

• Moving via crossovers :

• Average Reversion :

Examples of Cryptomed Market Correlation

Some examples of cryptocurrency and their correlations on the market:

• Bitcoin (BTC) and Ethereum (ETH): Both are considered to be assets of safe haven and tend to move independently.

• Ethereum (ETH) and Litecoin (LTC):

• Solana (Sol) and Cardano (ADA):

Conclusion

Assessment of market correlation is an essential step in understanding the dynamics of the crypto market. Analysis of historical data and technical indicators, investors may be better there are correlations between cryptomes

Recommendations

Cryptomena:

• Determine your investment goals : Understand what

2.

Ethereum Cash Work Broken