- XRP and BTC have lost the long-term price correlation in recent months.
- Despite the argument in the XRP camp, both assets followed the same sentiment route.
As two of the most prominent cryptocurrencies that have garnered significant attention and interest, Ripple [XRP] and Bitcoin [BTC] ignited an ongoing debate about the correlation between both assets.
Realistic or not, here’s XRP’s market cap in BTC terms
In the past, some have argued that Ripple’s use cases set it apart from Bitcoin. Others, on the opposing side, believe that the fate of XRP is intricately tied to the performance of BTC.
BTC and XRP diverged
The conversation arose again when John. E. Deaton weighed in on XRP’s reaction to the recent Singapore expansion. The lawyer, who openly supports XRP, explained that the token followed BTC’s direction despite the positive development. Deaton mentioned,
“If all XRP holders in are in a common enterprise with Ripple and relying on the successful efforts of Ripple, you would expect XRP to react. Yet, it does what it always does – follows Bitcoin and the macro environment.”
Although XRP has correlated with Bitcoin at several points, the recent correlation coefficient was 0.19, based on Macroaxis data.
Source: Macroaxis
For the unaccustomed, the correlation coefficient is a three-month statistical measure used to estimate the degree of returns between assets. So, the value mentioned above suggests a divergence in performance.
And one cogent reason for this is the way XRP outperformed BTC due to the optimism related to the outcome of the SEC case.
Dispute along the same lines
In response to Deaton’s comments, the Ripple community house was divided. While some supported the take, others pointed to the token’s suppression amid Bitcoin’s recent rise, implying that the CryptoLaw founder’s opinion was not accurate.
For instance, pseudonymous XRP faithful Dark Defender opined that Deaton was wrong. He mentioned that there has been a total slip in the interdependence saying,
“I don’t think so & disagree with this statement. XRP would have had similar technical moves compared to Bitcoin if XRP followed BTC. So even this argument substantiates their different dynamics, although both are in the same arena.”
However, it seemed that there was some truth to Deaton’s opinion. But this was based on market sentiment instead of price action.
How much are 1,10,100 XRPs worth today?
According to Santiment, BTC’s weighted sentiment was -1.40. Yet, XRP followed the same route at -0.613. Usually, this metric spike when the vast majority of messages around an asset turn positive at the same time.
So, the weighted sentiment downturn for XRP and BTC suggests that the crypto community polarity wasn’t optimistic.
Source: Santiment
At press time, XRP’s value reduced by 1.08% in the last 24 hours, losing the $0.5 threshold. However, BTC maintained its hold on $30,000.
Author: Victor Olanrewaju ::: Source link
