The price movement of several cryptocurrencies has often been correlated with various factors and sometime’s even the price movement of other currencies. Brian, from Binance Trading, elaborated on the same in a recent short podcast or ‘minipod’. He addressed the various correlations between cryptocurrencies specifically during the Q3 of 2019.
The report that the exchange’s research team revealed that the price of the king coin witnessed a 30% fall this quarter while prominent altcoins also plummeted by 38-60%. Additionally, the market dominance of Bitcoin reached 70% in Q3 and the trading dominance of Bitcoin was over 40% of trading activity on Binance further utilizing BTC against stablecoin pairs.
Bitcoin recorded trading dominance of about 15-25% during the first half of 2019 which is significantly low when compared to the current numbers.
Cryptocurrencies with larger market caps exhibited an increased correlation with one and other when compared to the previous quarter. Additionally, proof-of-work based assets recorded a stronger correlation with each other. Along with these privacy-centric coins including Dash, Monero and Zcoin also detailed increased correlation with each other when compared with other assets.
Additionally, researchers noticed a better correlation with the tokens listed on Binance than the ones that weren’t a part of the exchange. The report also revealed that Ethereum was one of the most correlated cryptocurrency in the industry. The researchers from Binance believe that this might be the standard for correlation in the future.
It was also noted that the trading dominance of the king coin surged faster than its market cap dominance which further implied that altcoins weren’t of interest to the market.
Additionally, XRP recorded a high correlation with Stellar while Huobi token which is the native token of the Huobi exchange was strongly correlated to Binane’s BNB. However, several cryptocurrencies primarily recorded the highest correlation with ETH.
Litecoin’s ailing price prepares for breach of descending channel
Litecoin noted a sharp fall on 15 November, a fall that caused its price to fall from $59.97 to $55.63. This 7.24% fall was followed by the price of the coin climbing up. However, it fell soon after the rise. The price of Litecoin at the time of writing hovered at around $58.07 with a market cap of 3.75 billion, while noting a trading volume of $2.90 billion.
Despite the falling price, however, Litecoin noted the formation of a bullish pattern that might provide a boost to its price.
The hourly chart for Litecoin [LTC] saw a descending channel extending along with the falling price. The pattern, characterized by two sloping trend lines, marked the lower highs of LTC at $60.26, $59.16, and $59.03 and lower lows at $59.38, $58.94, and $58.53. As the price remained constricted within the downward trend, a breach in the pattern might lead to the price of LTC surging.
The 50-day moving average underwent a crossover with the 100-day moving average, indicating a bullish move. The 100-day moving average dominated the LTC market for over five days and the coin lost 4.08% of its value. However, with the 50-day MA leading the charge, an upward surge might be coming soon.
The MACD indicator noted strong bearish momentum in the market, as the MACD line remained dormant under the signal line. On the other hand, the Relative Strength Index highlighted a change in tides as the signal line bounced back from the oversold zone and was pointing up.
Litecoin’s falling price might find respite with a breach of the descending channel. However, the coin might undergo further devaluation before it could note a spike.