The relationship between the price of Bitcoin as the leading cryptocurrency and Ethereum as the second has fallen below 80 percent, for the first time since November 2021. This is one of the main indicators of how they are mutual competitors are more and more separated, and less dependent on each other, which proves it different price movement, and loss of correlation.
Generally speaking, the correlation factor measures how much and when the prices of separate cryptocurrencies move in the same direction. The smaller the correlation, the more we notice price movements in a different direction. We could interpret this as independence and separation, which was mostly the case before rule.
The previous month, the largest American cryptocurrency exchange Coinbase conducted a correlation analysis between these two giants. The fundamental conclusion is that the correlation has been declining since mid-March which we can attribute to Bitcoin outperforming other cryptocurrencies. Also, a big one pessimism and mistrust of the American banking system played a role, and lack of regulatory oversight.
As another possible reason for the declining correlation between Bitcoin and Ethereum is, an upgrade to Ethereum better known as the Shanghai or Shappela fork. Viewed from the side of investors, the decline in correlation strengthens the arguments for diversification, and for inclusion in both cryptocurrencies.
In addition, the price of Bitcoin in this calendar year has grown by a whopping 62.78 percent, while Ethereum achieved a somewhat weaker result, increasing by 51.05 percent.