The strong correlation between price and market dominance

/u/Pooky135790Cryptocurrency News & Discussion https://ift.tt/jE2nHgC

With the rise of altcoin / Memecoins season, I was interested in how this would affect Bitcoin's market dominance. This lead me to research the correlation between Bitcoin price and Bitcoin market dominance. Please enjoy this analysis of the market - I hope you enjoy I understand that some of you don't have time to delve into the full analysis, so here is the TLDR for you busy folks. TL.DR: There is a strong positive correlation between BTC price and BTC market dominance. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Now for the analysis: 1 Month Price Chart ​ 1 Month Dominance Chart We can see a very clear correlation between dominance and price level when looking at the past 1 month of data. We can clearly see that dominance spiked and dipped at the same time as price, proving a very strong correlation between the data. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 6 Month Price Chart ​ 6 Month Dominance Chart Here we can once again see a very strong correlation between the data. Over the last 6 month timeframe, as can almost follow the dominance chart and see a near replica on the price chart. Once again, we are seeing a very strong, positive correlation. ​ --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 1 Year Price Chart ​ 1 Year Dominance Chart Here we again see a very strong correlation. Initially, I would this very surprising. I would personally expect for BTC dominance to rise during the bear market, as more people would be looking to go into more stable crypto currencies. However, as proven by this data, the price and dominance are very strongly correlated. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ​ Conclusion: BTC price and dominance have A very strong correlation. Even looking back a data from the bear market, where many would intuitively think that BTC dominance should grow as people would be looking to invest in more stable crypto, this is not the case. Despite the bear market, dominance still fell. At the same time, during the bull market, dominance increase almost proportionally to price increase. This should the immense strength of the correlation between these two. We can also see that BTC dominance was not affected by the rise of the recent Memecoins season, so there's that. ​ Hope you guys learnt something new ​ As always, good luck and happy trading submitted by /u/Pooky135790 [link] [comments]

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