Data analysis: Has BTC drawn a clear line with traditional assets? Index correlation drops to a low point

In a new article published on X, market intelligence platform IntoTheBlock noted that BTC’s correlation with the U.S. dollar index and stock market indices such as the S&P 500 and Nasdaq 100 has recently fallen to lows.

The relevant metric here is the “correlation coefficient,” which captures the linear relationship between the prices or values ​​of any two given commodities or assets .

When the value of this indicator is greater than zero, it means that the assets in question are currently moving in the same direction. The closer the indicator value is to 1, the stronger the correlation is and the more obvious the similarities between the two price trends are.

On the other hand, a negative indicator means that there may be a correlation between commodities, but this correlation is negative. This means that if one asset goes up, the other asset will go down. Similarly, the closer the coefficient is to -1, the closer the assets are to each other.

A correlation coefficient of zero or close to zero indicates that there is little correlation between the assets. Below is a table provided by IntoTheBlock showing the correlation coefficients of BTC and ETH, two of the top Crypto assets, with various indices:

As shown in the above figure, the correlation coefficient between BTC and the US dollar index is -0.01, which means that the digital asset has no correlation with the US dollar index.

On the other hand, ETH is somewhat correlated with DXY, with the current correlation coefficient at -0.63. A negative value naturally means that ETH moves in the opposite direction of the index .

As for the other indices, the correlation coefficient values ​​for BTC and ETH are both between -0.3 and 0.3, meaning these digital assets have no real relationship with these indices.

ETH and the VIX index are an exception. The second-largest asset in the Crypto space currently has a correlation coefficient of 0.49 with the index, which is a noteworthy value.

BTC and ETH have very little correlation with traditional assets, which could be good news for their investors, as both assets appear to offer a way to diversify a portfolio .

However, BTC and ETH don’t offer much diversification, as some recent data shows that ETH and many other top assets in the space are highly correlated to BTC.