Correlation between the Bitcoin market and the altcoin market dipped in the second quarter of 2019, claims Binance.
The Malta-based cryptocurrency exchange pitted Bitcoin against thirty alternative cryptocurrencies to determine whether or not it moved in lockstep with them. The exchange noted that all the known altcoins were tailing the Bitcoin price trend positively in Q2/2019. Nevertheless, the speed at which they followed the leading cryptocurrency experienced a drop, implying that the altcoin market, as a whole, failed to run along with a supercharged Bitcoin price rally.
“Bitcoin (BTC) became less correlated with other crypto assets in Q2 2019 relative to the first three months of 2019,” read Binance. “Correlations declined between Bitcoin and altcoins, with a decrease in the average correlation of -0.11.”
In retrospective, a perfect positive correlation between two assets reflects their 100% probability of moving in the same direction. Conversely, a negative one means that the two would always run in the opposite direction. Assets with a correlation score above 0.5 show positive correlations between the two, while a score below -0.5 exhibits negative associations.
Binance noted that Ethereum came closest to Bitcoin with a 0.81 positive correlation in Q2/2019, down from 0.889 of the previous quarter. Similarly, the XRP-to-Bitcoin correlation dropped from 0.875 in Q2/2019 to 0.69 in Q1/2019. The statistics appeared the same across the rest of the cryptocurrencies, including Litecoin, MIOTA, EOS, Bitcoin Cash, Bitcoin SV, and others.
Flight to Quality
The said dip appeared in line with the Bitcoin’s growing dominance in the cryptocurrency market. The leading cryptocurrency mousetrapped more than 63 percent of the total market valuation,