An hour ago Ethereum went up rapidly and will soon most likely hit $ 100 mark. I got very happy because of my investments in the cryptocurrency. However, I got a little suspicious when I later discovered Bitcoins movement.
My theory of the correlation between Bitcoin and Ethereum
As you can see on the two graphs above, the correlation between Bitcoin and Ethereum is clear. It seems that when one of the cryptocurrencies go bullish or bearish the other currency does the opposite in the short term. For me, this indicates a unstable market. Some people trade the both currencies together, when one of them go bullish, the sell it and by the other currency. This creates high volatility on the market which is not healthy in the long run. If cryptocurrencies want to become attractive to the main investors and later then on have a larger market cap, a few rich people have to stop manipulate the market for short term gains.
I know there are different reasons of why a cryptocurrency go bullish or bearish, however I see a pattern which is very striking. A problem which is not easily fixable. The only solution is by introducing tokens that creates stability, like what Ethereum soon will introduce which I think is a great step in the right direction.
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