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Correlation

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
Is IOTA following NANOcurrency?There seems to be a similar pattern forming between Nano (formally RaiBlocks) and IOTA vs BTC. Both use similar technologies, or are at least crypto-currencies using ledger technology other than blockchain. Nano seems to be the most bullish of the two with more activity in the current new cycle, Binance trading, Rebrand but also FUD regarding Bitgrail Fiasco. If the assumption that IOTA might be following NAno is true, IOTA is about to see another pump cycle soon. Please let me know your thoughts and comments guys. What do yall think of DAG and Tangle?
N
by GibbsGibbleton
BTC becoming tech-as-usual (Loosely, for now) On this chart: BTCUSD (candles) NASDAQ Composite (blue stepped line) for (loose) reference BTC Moving Average (white: 50D, Orange: 150D, Yellow: 300D) BTC Trends (Green: UP from lows, Red: down from highs) BTC Fib retracement from 2017-12-17 ($19891) down to 2018-02-06 ($6000) BTC Fib retracement from 2018-02-06 ($6000) down to 2018-02-20 ($11788) It never was a crash. I repeat: this was not a crash . It was a healthy correction, which we'll call a sanity/reality check . It seems like the end of an era, which we'll probably come to know as the "innovator" phase in the S-cycle of cryptocurrencies . "Consideration" has ended and we and have begun "investigation" of DLT (Digital Ledger Technologies, a.k.a "cryptos" for the layman), as illustrated by the intensified interest of officials (from authorities to public systems-makers, e.g. governments and central banks). Bitcoin and friends are no longer exotic libertarian proofs-of-concepts; more specifically the underlying tech is about to become yet-another-department in most states and corporations. Job offers are rising fast. We'll soon see a slew of degrees as early standardization takes place. There is one implicit (albeit loose, nascent) correlation that we can observe emerging during the last six months. I've displayed the NASDAQ Composite (Stepped Thick Blue line) on the chart. It's pretty obvious that BTC no longer makes moves in a pure vacuum. Some will say that Futures helped movement correlation; I won't speculate on the why and will leave it at the how for all to subjectively see. Next, let's observe the untenable rise (Frenzy) that peaked on Dec, 17 ($19891). I've retraced the Fib (called 6 shades of red... appropriate don't you think? ) down to the low ($6000 on Feb, 6) fifty-one days later. Guess what the 50 Days Moving Average (White line) is currently tangential to? You've guessed it, the big fat downtrend line from said peak (Dashed Red line), which two days ago crossed the 38.2% retracement (Red Arrow) . Just this market's way of telling us that no, this X-mas spike shouldn't have been , were we rational. This is FOMO/FUD for you, and again, let's leave it at that. If you're trading, you know: General Public + Hype(r) Media = Spiky Charts . Name of this game. They thought that for crypto, sky wasn't the limit? That it would go above and beyond, to the moon ? Well, guess again: this white moving average is well-deserved cloud-line. Above: high HODLERS , below: sentient beings. Leave the damn moon alone! Now when we cross the cloud line, eventually, we'll do it as it should be: like a cruising jet-liner. Safe, steady, and sound. The 150D Moving Average (Orange line, like bitcoin's logo, that must mean something right? ) is boring. It's exactly where we stand in price now (Orange Arrow; I chose that value for this very reason, 150D = 5 months, back to late September's low point before we hit mainstream media). It's the one line that's real in this chart, the chosen one that deserves to cross the red downtrend, and breakout from the Fibonacci's. Lastly the 300D Moving Average (Yellow line) meets the long Up Trend (Dashed Green line) right when it meets the price (Feb 6, green arrow). This is the best candidate for a sane base valuation of BTC: I have no doubt that it isn't worth any less on that date. Call it a baseline support for DLT . (In the first comment below I'll quickly discuss Volume Profile, in conjunction with averages and retracements.)
BITFINEX:BTCUSD
by PhiChris
1
Inverse Correlatoin Between DGD (DigixDAO) vs BTCThe graph above shows a comparison line chart between DGD (DigixDAO) vs BTC over the last 30 days. As you can see the correlation between the two is quite significant. It's not a -1 inverse correlation against Bitcoin so it's by no means a perfect hedge against a drop of BTC but good enough to trade on we think. To test this "theory", we thought lets put on a trade for DGD/BTC when BTCUSD is weak and dropping. So that's what we did this Wednesday: We've entered DGD/BTC after it clearly broke out of its equilibrium/triangle pattern and was also when BTC/USD broke through a support level. The drop of Bitcoin last Wednesday wasn't that severe when we've entered the trade cause BTC dropped quite a bit already hours before but with our trade, we've managed to make about 6% in a short amount of time. DigixDAO or Digix (DGX) is also an interesting project/coin. Digix tokenizes gold on Ethereum. Every DGX = 1 Gram of gold. You can own, save and transact Gold in tokenized form - keeping secure private ownership of your digital assets. Basically, you can see it as digital gold. This inverse correlation is much like the inverse relationship between the stock market and the gold price. When the stock market drops (heavily), gold price tends to rise and vice versa. You can trade DGD/BTC on several exchanges but the mean exchange with by far the most trading volume is on Binance. So try it out yourself next time when BTC drops again. We think it's one of the best ways to profit from a drop in BTC and "hedge" your Bitcoin position against it without having the option to go short or with margin trading. Please like and share if you found this informative and helpful. Leave a comment if you have any questions. And until next time, good luck with your trading!
D
by Trade_Masters
3