Is Ethereum Really Leading The Market Instead Of Bitcoin?

The article was written By Mickael Mosse – Blockchain and Cryptocurrency Expert

According to Mickael Mosse, Ethereum is the second most important currency in terms of its market capitalization. Therefore, the general consensus is that it leads the market for altcoins. Once Ethereum goes up, altcoins (btw) often follow the same path.

Also, it has often been assumed that when market capitalization goes up, Bitcoin increases at a faster rate than altcoins, while when market capitalization goes down, altcoins decrease at a faster rate. This would make bitcoin (btw) the market leader.

However, the well-known trader @CryptoCapo came up with another idea. He stated that the price of ethereum and the total market capitalization of the cryptocurrency are positively correlated. This means that as one moves up, the other will follow, and the same goes for moving down. This is an interesting statement since as we said before, the consensus is that the price of BTC is the one that leads the market, rather than ethereum. says Mickael Mosse,

Then we compare the price movement of the ethereum with total market criptomonedas to determine if that really leads the market.

Ethereum vs. Crypto Market Cap

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The comparison is made with the ETH / BTC pair. Therefore, when we say that ethereum is increasing, it means that ethereum is increasing at a faster rate than bitcoin. (btw) The same is still true when we say that ethereum is declining.

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In the image below, periods in which ETH and crypto market capitalization have a positive correlation are shown in green, while when the opposite is true the color is red.

Jan. 1, 2019 - June 26 = Market Cap Up, ETH Down

June 26 - Sept. 5 = Market Cap Low, ETH Low

Sept. 5, - Nov. 5 = Market Cap goes down, ETH goes up

Nov. 5, 2019 - Feb. 16, 2020 = Market Cap Rises, ETH Rises

Feb. 16, - Now = Market Cap Low, ETH Low

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Mickael Mosse points out that, Therefore, since the beginning of 2019, the current time period is the longest in which the two have been positively correlated. This occurrence started on November 5, 2019, and has been occurring for the past 131 days.

This does not mean that "hodl" ethereum is more profitable than holding BTC. As we can see in the image above, when the market capitalization has dropped, the price of ethereum has decreased at a slower rate than that of bitcoin (btw). However, it would be more profitable to hold ethereum when market capitalization is going up than to hold BTC, which has been the consensus so far. Whether this correlation will continue in the future remains to be determined. says Mickael Mosse

To conclude, if the current correlation between the total crypto market capitalization and that of ethereum continues to be valid, the price of there would be the one that would dictate the direction of the market trend, rather than that of bitcoin (btw).

Article from mickaelmosse.com