Most altcoins tend to be correlated with Bitcoin. Sudden price movements will cause smaller altcoins paired with Bitcoin to do the same, which can be a boon and a bane for the project. XRP is no stranger to the correlation game, and is said to be strongly correlated with Bitcoin. However, according to a recent tweet by eToroX, the correlation between XRP/BTC and XRP/USD has been falling.
— eToroX (@eTorox) July 15, 2019
According to eToroX, the correlation coefficient, which is used to determine the extent of correlation, was at 0.51 in 2017. This correlation has come down to negative 0.63 now. A negative correlation coefficient means that the prices are not correlated anymore, and that XRP/BTC and XRP/USD pairs can move without being affected by the price of BTC.
According to CoinMetrics, the XRP/BTC correlation coefficient is still positive and so is the XRP/USDT correlation. As seen below, XRP/BTC’s Spearman correlation coefficient is 0.7626, a little lower than its all-time high of 0.8502. The Pearson correlation coefficient is also positive, i.e. 0.70. The XRP/USDT Spearman correlation is at 0.3502, while the Pearson correlation coefficient is at 0.30.
The XRP community has been eagerly waiting for a spike in XRP’s prices since 2018. However, the price has decided to stay quiet or tumble down. The community continues to wait with bated breath for the next ‘alt season,’ in hopes of the price going higher.
The price of XRP, at press time, was $0.31 and the market cap was at $13 billion, which puts it as the third largest cryptocurrency in the world, in terms of market cap. It is also very close to hitting its support level at $0.27, which has been breached six times in the past year.
News of the falling correlation was greeted positively by many in the community. Twitter user, @Bizhopcrypto, commented,
“This is actually a good representation of XRP’s ability to move independent of BTC in a sense…Although price action is moving south currently, we need that same correlation once XRP moves north as well 😉 #decouple”
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