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Correlation

Mispricing in correlated coins? Ripple and StellarRipple and Stellar Price Correlation is 88.8%. (+) Ripple and Stellar Returns Correlation is 49.86%. (+) Wanted to check out if there is any mispricing to profit from by simply betting on the one that diverges. However as we can see from the chart, there is no clear indication on who is the market leader (the one that determines the overall trend) and both Stellar and Ripple take turns to lead the movements. The extent of the movements is also unclear. Maybe we can see it on a lower timeframe? (But it shouldn't matter actually) Conclusion: Cannot really profit from mispricing since there is no clear indication of who is the leading the trend and converges back to the norm by either coin. Furthermore, correlations are not causations. Sometimes it may that A and B are correlated but actually its C that is causing A and B to be highly correlated. Therefore there is a need to check on a whole range of other correlations between as many assets (other coins, especially the largest ones like bitcoin and ethereum, and prob USD) Lastly, a correlation study is historical and as we all know in this industry that past returns are no guarantee of future success as factors causing correlations can change over time.
KRAKEN:XRPUSD
by BlackPapaya
Dread Pirate Roberts And His Correlation With Bitcoin Dread Pirate Roberts aka Ross Ulbricht And His Legal Proceedings October 1, 2013 - Ulbricht arrested. Bitcoin crashed immediately but only to instantly enter it's 2013/2014 bubble November 18 - Ulbrichts Silk Road account, Dread Pirate Roberts, logs in despite Ulbricht being in prison. Major correction occurs in the bubble. November 22, 2013 - Silk Road goes offline. Last pause/consolidation before a new ATH/bubble top. Fast Forward through clear, extreme and categorical corruption, as well as multiple violations of the constitution by the US government in many facets. (Where’s Samuel L. Jackson when I need him?) February 4, 2014 Ulbricht indicted. Beginning of a major crash and the subsequent brutal bear market. January 14, 2015 - Trial begins. First bottom of the double bottom is made. February 4, 2015 - Ulbricht found guilty. Beginning of the consolidation for a trend reversal. May 29, 2015 - Ulbricht sentenced to double life + 40 years (ow, right in the feels). Short term bottom within the consolidation band between the double bottom. The bottom of the bear market occurred a handful of months later. August 18, 2015 - No correlation with Ulbricht. Second and final bottom of the bear market is made. January 2016 - Appeal filed; smack dab in the middle of an important consolidation period after the bear market downtrend was broken. May 31, 2017 - Appeal denied. First big and continuous leg of the next bubble cycle occurred over the previous 2 months. December 22, 2017 - Petition for Ulbricht's Writ of Certiorari(his last hail mary) to have the US supreme court review the case. they eventually picked it up shortly after. The first bottom after the bubble’s peak and the beginning of a bear market. February 5, 2018 - 21 organizations hop on board Ulbricht's petition. This is the EXACT SAME DAY that market made its first significant bottom with high volume. March 7, 2018 - 7th) US government responds. One of the responses was the dismissal of the sixth amendment claim because "No precedent has been made." Double top pattern completing and signaling the next downside leg in the movement. March 20, 2018 - Ulbricht responds. Short term top. June ??, 2018 - Supreme court makes decision. early/mid 13/14 bubble - shady business(average folk like us ain't allowed to know what happened) end 13/14 bubble - finalizing Ulbrichts indictment and the categorical evisceration of the Silk Road. Bubble Top occurs a few days later FF through court business January 2015 - Trial begins. Trend goes from bearish to neutral. FF standard legal stuff December 22, 2017 - Ulbricht goes all in on the supreme court Bubble top occurring February 4, 2018 - Legit organizations step in to help Ulbricht. Major bottom occurring. March 7, 2018 - US government says “Not so fast there Bucko” top occurring The anticipation/uncertainty leading up to the major legal proceedings, ie. court/supreme court, occurs in a downtrend while the major legal proceedings occur in an uptrend. I don’t know what the supreme court decides but there is anticipation/uncertainty now and the downtrend is occurring. Therefore an uptrend should have begun by the the same time the supreme court makes its decision, "by june". I’ll say the average all of the possible days that could be; June 15(probably closer to 30th). It's the same time area that consistently pops up in my analysis and agrees with McAfee Ulbricht shot down - US given go ahead for being police state(take it with a grain of salt here). Not good for bitcoin. Ulbricht given glimmer of hope - More clear and outright evidence that compounds the fact that the US government is corrupt; to a higher degree than we have already established. This should, but I highly doubt it will, spark a stronger cultural movement(or revolution) against "the establishment" due to how invasive and corrupt the masses now perceive it to be. Good for bitcoin freeross.org
BITFINEX:BTCUSDLong
by Lando_CalJizzian
correlation myths and mysteries, crypto doom of asicsSo back to basics, without any background in economy, financial trading, except experience, logic and an analytical mindset. by overlaying S&P 500 with btc, you see that both move in similar ways, with S&P slightly leading BTC. does this mean we can predict btc's direction with S&P 500 as guideline? guess not as they are totally not coupled. S&P relates to bussiness and the trade in big players in the economy of the world. BTC has no direct relation to the real world, it is in some sense tied to certain Fiat currencies, as btc is the main value being used in the crypto currencies trading platforms. High activity on the overall crypto market, causes btc to move its needle. But there are obviously other factors at play too. big holders can move the needle as well. with the majority of BTC hashrate in china, and the fact that the main BTC pools are also in chinese hands, means that they have a leverage that is disproportionate, and they are capable of moving the BTC needle in whatever direction they want. just an imaginary scenario, say all the big BTC pools dump their holdings in a fell swoop when price rides high.. you evaporate billions of value. which will impact the economy. would a spread portfolio over multiple crypto currencies help? No it will not, look at the historic graphs overlay btc with any other coin, you will see that they rise and fall with BTC, some magnified, some reduced, but if btc drops to 1$ some day... the rest of the coins will be a fraction of that. doom scenario . that is why it is important to support asic resistant coins. XMR did a good attempt, but I am afraid the changes are not big enough to deter the asic builders. asic design used to be very expensive, nowadays its not the case anymore ROI is reasonable if you can have a few months of runtime out of your asics. which typically use low power, combined with high hashrate. ( 10-20x compared to best ( and expensive) GPU's at a fraction of the power) try to run 10TH/s btc with GPU cards, calculate the power draw including cooling and aquisition cost... system board 100$ GTX1080ti 1000$ * n ( 4GH/s per card : n=2500) =2.5M$ gpu's with around 450 KW of power which also needs cooling. with cheap electricity -> .01 $ / KW -> $4,50 per hour :), this leads to a loss of $4,25 per hour, aka as a yearly loss of $37K with ROI to infinity. then compare to a antminer of similar performance, look at the power draw including cooling ( running cost) and aquisition cost example Antminer T9+ 10TH/s -> 1406W... hourly profits : 0,24$ yearly $2075, break even in 201.9 days. so the question is, has S&P been influenced by BTC manipulations or does the S&P influence btc ( macro economic behaviour) to be continued
BITFINEX:BTCUSDEducation
by byteminer
BTG perhaps on bottomBTG is still alive! There is more volume in trading in this coin, than in other altcoins. So this is good news. And - even if it´s not 1:1 correlated to BTC the correlation is rather high - as can be seen in the graph. If BTC remains above the actual support - as I´ve mentioned in my BTC- analysis - this means for BTG that it also will stay above the support 40$ (swing trend line). Combining the last dips we see a small ascending trend. Of course, in the long run BTG is still in a bearish cycle, as the majority of all crypto coins and tokens. So it has to break the long descending trend line (dotted) before initiating a new trend. The first aim could be 56$ (swing trend line) and then the last swing trend line at 78$. This only will happen if BTC also climbs (and other altcoins too). But this is no fairy tale, it is very possible. Stop: On the other hand, if BTG plumps down and breaks the support at 40$ it is probable that a new all time low will be seen. Indicators: RSI in neutral zone and above ascending trend line ADX: trendless EMA 50: turning from bottom to up, and BTG just on the line volume: good, should be enough for new dynamic
BLong
by Luettis
correlation between BTCUSD and USD index?after scaling DXY by quite a bit there is noticeable correlation with BTCUSD - my other chart tries to "decrease" the DXY influence (which in such case may actually be pretty big, for whatever reason) from the BTCUSD chart. What I'm trying to say in other words is that regardless the fact BTC value expressed in USD has it's own path in time which is pretty volatile and mainly going up for number of years, with the progressing adoption amd new players coming in it may become pretty sensitive to US Dollar strength recent months.
TVC:DXYEducation
by ciekawy
1
BTC on strong supportBCH has bounced on a strong support level, formed by a swing trend line coming from nov 2018. Also the coin is within a narrow negative trend channel; often a tightening of the channel indicates a change in direction. BCH is correlated to BTC with a ratio of 0.47 - based on daily closes. It is far more correlated to Santiment, QTUM, DASH or IOTA (> 0.70). So the impact of BTC isn´t to be overvalued. Nevertheless, if BTC has a good sentiment, then the altcoins, BCH included, have a good run either. With the help of BTC or ETH (corr 0.42) BCH should have enough support to stay on the support and to gain some strength. To give really positive signs it must break the trend channel to the top and remain outside. Once it has done this the first aim can be the swing trend line at 1.056$ and after this the fib retracement 23.6% at 1.195$. This second resistance is strong and we should take some profit. Stop / no invest: if the actual support is broken to the bottom! Indicators: RSI low but climbing; hasn´t broken the trend yet. ADX DI- falling; perhaps a trendchange? Volume: lowest level ever!!! the risk for malinvestments is higher at markets with low levels!
BLong
by Luettis
2
Bitcoin to altcoins Correlation Analysis (Attempt)There was this question I read in a blog or page: How come altcoins follow bitcoin especially when they go down? I believe that this is not exactly true so I pulled this graph if it makes any sense. But I found some interesting information as always when we talk about correlation within a market (crypto-market). We see that end of 2017, bitcoin (and bitcoin token CXP) was leading the charge to the upside dragging almost every altcoins with it. But when it came to an halt on 17/12/2017, interestingly all altcoins took an incredible advantage into January 2018! So while BTC was plummeting, we can see that bitcoins were offloaded in fiat currency but also in other altcoins as bitcoin and altcoins were totally de-corrolated after 17/12/2017. It is only on 17/01/2018 that those markets realigned again and continued to sink until 06/02/2018. Then, bitcoin was resiting the downside pressure by holding its 06/02/20187 low while most altcoins were already breaking below till 18/03/2018 where we clearly see a realignment of all crypto-currencies. And since then looking at BTC crosses with altcoins, I can see few altcoins outperforming BTC. When bitcoin goes down, do altcoins perform so bad? Not so sure. When bitcoin gets better, altcoins underperform (after the 17/12/2017). Now what we saw from 17/01/2018 to 02/06/2018 is that the all crypto market was beaten and were offloading to fiat currency again. So, this is what we see in other markets. Primary correlation is that cryptocurrencies all went up and down but looking into detail, we clearly see the role of bitcoin for altcoins: So, it would mean that bitcoin is the reference for fiat currency (I buy Bitcoin with fiat) and altcoins are referring to BTC, so bitcoin becomes the reference for the altcoins. And this realignment happened only few times 17/01/2018 and 06/02/2018 and now. What does that tell us? - Until 17/12/2017 cryptocurrencies followed the path of bitcoin and bitcoin tokens with fiat going into this market. - After 17/12/2017, bitcoin offloaded in fiat AND other altcoins. Gradually in time, altcoins start to offload in fiat all together - after 17/01/2018, the all cryptocurrency market suffers and offload in fiat - after 06/02/2018, bitcoin found a bottom and fiat started to pour again into bitcoin and altcoins - after mid Februay, bitcoin would be fueled by fiat and other altcoins finding refuge into bitcoin (still seen as reference) - after 18/03/2018, bitcoin recovers but altcoins outperforms. fiat currency fueling the market and also altcoins regaining credit. So, to me, from this chart, I understand that bitcoin is the entry for fiat into the crypto-market and for those converted to the technology and believers, bitcoin is the crypto refuge for altcoins. So, I am not sure that bitcoin will disappear altogether, but in future, it will lose its reference as it will be easy to access the other markets. What do you think?
BITFINEX:BTCUSDLong
by The_202_Quants
4
BTCUSD correlation to traditional markets NASDAQ Tech and DOW- stronger rebound in traditional markest, shows the trust difference - mostly positive correlation except in one zone the Bitcoin is showing more weakness, caused by stricter regulations, Mt. Goxx sell off, behavioral finance and more, which compromised the optimism also the option of short leaveraged short sellers could give a stronger negative pressure - under 5435$ strong weakness and high risk, but should hold through strong fundamentals in long term at around 5000~4800$
BITFINEX:BTCUSDLong
by Psymon
ZRXBTC TRADE SETUPFollowing the article on correlation, I present ZRXBTC for a long trade and practical example of the importance of 18/03/2018. As we see, a cycle ended at 27/01/2018 high in a 5 waves up (RSI divergence in 4H and daily timeframe), so according to EW, this is calling for another 5 waves up. All cycles identified by vertical lines ends very precisely at 100% extension of the first leg of the cycle (all corrective in nature, despite the amplitude of each cycle), and at 0.00004819, we reached convergence of 3 major cycle ending and last one being truncated at 61.8%-78.4% which is quite common. On 19/03/2018, those cycles ended and the highest degree as shown here with RSI breaking up its downtrend line. So from here, I propose buying 0x token against BTC from this level and lower if reached with stop below the 19/03/2018 low and target 0.00226-0.000268
Long
by The_202_Quants
7
How does the Stock Exchange relate to BTCUSD's price?Redline: VIX Purple area: DJI Index Blue area: BITSTAMP:BTCUSD www.cnbc.com "Autonomous Next also estimates that the "crypto-funds" have about $2.3 billion in total assets under management." When BTCUSD/DJI Index correlation started to really correlate: 15 Nov. 2017. "Billionaire Investor Novogratz: Institutional Investors Will Soon Adopt Bitcoin" www.bitcoinisle.com November 14, 2017 "Massive Hedge Fund Likely to Begin Trading Bitcoin" www.bitcoinisle.com November 15, 2017 "How High Bitcoin Could Reach Before The Average Investor Sells It?" (author has interesting articles) www.forbes.com "Breaking: CME Group to Test Bitcoin Futures Next Monday, Price Hits $7800" www.bitcoinisle.com November 16, 2017 Sidenote: "Breaking News: Segwit2x Fork Cancelled" news.bitcoin.com November 8, 2017
BITSTAMP:BTCUSD
by NeoButane
6