The development of Bitcoin and Ethereum has been an ongoing situation throughout 2020. When the market pumped between January-February in 2020, Ethereum blindly followed Bitcoin in the charts, as their correlation index surged from 0.826 to $0.881. During the collapse as well, the correlation continued to increase, tipping off at 0.901.
Many suggested that despite its importance, Ether continued to be dependent on Bitcoin for a bull run. The tables have largely turned now over the past few months and it is evident with respect to the recent data.
According to the above skew chart, Ethereum is currently inflicting its largest price percentage with respect to Bitcoin in a year. Ether value is 3.3 percent of Bitcoin price which was last observed in June 2019.
Besides, the 1-month correlation between Ethereum and Bitcoin dropped down to 58 percent on 1st August. Before 1st, the correlation between Ethereum and Bitcoin was above 90 percent in the industry.
Ethereum Futures and $1 billion crypto liquidation
One of the main reasons for Ethereum steadily grown over the past couple of weeks is due to the growth of its derivatives market.
The total Ethereum Options interest on Deribit and OKEx is at an astounding all-time high of $313 million and $30 million respectively at the moment. Derivatives on Bitcoin’s end is not the most popular product anymore with ethereum carving out its own space in the futures market.
For Ethereum, it is definitely a huge boost since its exposure to traders on this platform will further lead to better classification and reach over the rest of the industry.
There was avid speculation that the recent sell-off at $415 ETH, 24-hours back took place due to the liquidations worth over $1 billion on Bitcoin and Ethereum futures contracts in a short period. According to data, it was the largest liquidation since March 13th, when Bitcoin and Ethereum had dropped down to $3600 and $120 respectively.
However, popular analyst Alex Kruger said,
“That was a blowoff top in ETH and BTC last night. A blowoff doesn’t have to be “the top.” Silver and gold had a blowoff top last week. See how similar charts are in the days and minutes preceding the crash. Bigger picture remains unchanged. Higher highs ahead in 2020 IMO.”