- As the price fell, the correlation between Ethereum and Bitcoin also decreased.
- New developments on the Ethereum network could benefit ETH in the future.
Bitcoin (BTC) has been in the spotlight for quite some time due to expectations for ETFs. As a result, Ethereum (ETH) lagged behind and the correlation between the two coins appeared to decline.
How to break up
According to data from Kaiko, the correlation between BTC and ETH has fallen below its historical average of 0.71 for the first time since 2021. In recent months, the two cryptocurrencies have seen different price movements, benefiting from ETF-related hype and speculation. ETH has had a relatively calm rise.
For the first time since 2021, the BTC:ETH correlation fell below the overall average of 0.71.
What does this mean for possible points? #ETH ETF approved? pic.twitter.com/qJSqVVDkbJ
— Kaiko (@KaikoData) January 18, 2024
Analyzing BTC’s performance leading up to ETF approval can provide insight into ETH’s potential trajectory. Over the past 365 days, BTC has witnessed a strong 100% return increase, surpassing ETH’s 60% return.
However, on the day of BTC approval, something changed, with BTC falling and ETH rising. This comes as expectations grow that ETH could be the next step toward acceptance.
Last week, spot volumes of ETH on centralized exchanges (CEX) surged to their highest levels since the FTX collapse.
In particular, there is a significant difference in trading volume between ETH and altcoins, favoring ETH, with the largest gap since March 2023.
This surge in trading volume signals increased market activity and interest in ETH, potentially signaling a change in dynamics within the cryptocurrency landscape.
Source: Kaiko
Ethereum’s development
However, some factors may help fuel interest in ETH in the coming months.
Aside from the possible approval of an Ethereum ETF, new developments in the Ethereum network may also give hope to ETH holders.
Read Ethereum (ETH) price prediction for 2024-25
The Dencun upgrade was recently deployed to the Goerli testnet, further solidifying the fact that the development team is making progress on the development front.
There was also discussion at the recent ACD meeting about deploying the Dencun upgrade to other testnets.
Quick update on today’s ACD call:
– The Cancun/Deneb upgrades of the Sepalia and Holesky testnets will be activated on January 30 and February 7, respectively.
– Client releases for both upgrades will be bundled and shared in a blog post next Tuesday.
– Full transcript of today’s call…— Christine Kim (@christine_dkim) January 18, 2024