<p><span data-preserver-spaces="true">The correlation between bitcoin and ether prices fell below 80% for the first time since November 2021, indicating a significant shift in the relationship between the two largest cryptocurrencies.</span></p> <p><span data-preserver-spaces="true">The rolling 30-day correlation between bitcoin and ether dipped to about 78% this week, according to data provider </span><a class="editor-rtfLink" href="https://twitter.com/KaikoData" target="_blank" rel="noopener"><span data-preserver-spaces="true">Kaiko</span></a><span data-preserver-spaces="true">. Correlation measures how closely the prices of two assets move together. When the correlation is low, it means their prices are moving in different directions more often.</span></p> <p><span data-preserver-spaces="true">In other words, the falling correlation means that BTC and ETH prices are not moving together as closely as they used to. </span></p> <p><img class="alignnone size-full wp-image-230719" src="https://www.tbstat.com/wp/uploads/2023/05/btc-eth-kaiko.jpeg" alt="" width="1308" height="702" /></p> <h2><span data-preserver-spaces="true">Bitcoin-ether correlation falling</span></h2> <p><span data-preserver-spaces="true">Last month, <a href="https://www.coinbase.com/institutional/research-insights/research/weekly-market-commentary/lower-btc-vs-eth-correlation-april-21-2023">Coinbase analyzed the correlation between BTC and ETH returns</a>. The exchange concluded that it has been falling since mid-to-late March as bitcoin began to outperform other cryptocurrencies against the backdrop of <a href="https://www.theblock.co/post/227647/yellen-fsoc-vote-silicon-valley-bank-signature-bank">U.S. banking sector turmoil</a> and heightened regulatory scrutiny on non-bitcoin cryptocurrencies.</span></p> <p><span data-preserver-spaces="true">"But the decline of that relationship has become more pronounced in the days following the <a href="https://www.theblock.co/post/226036/ethereum-shapella-upgrade-goes-live">Shanghai (Shapella) fork</a>, reminiscent of a similar trend observed in September 2022 during the Merge (when Ethereum changed its consensus mechanism to proof-of-stake)," Coinbase said at the time.</span></p> <p><span data-preserver-spaces="true">Theoretically, a falling correlation between two assets reinforces the case for diversification by including both assets in an investment portfolio.</span></p> <p><span data-preserver-spaces="true"><a href="https://www.marketwatch.com/investing/cryptocurrency/btcusd">Bitcoin</a> and <a href="https://www.marketwatch.com/investing/cryptocurrency/ethusd">ether</a> prices are up around 62% and 50% so far in 2023, respectively, <a href="https://www.theblock.co/data/crypto-markets/prices">according to The Block's Data Dashboard.</a><br /> <iframe frameborder="0" height="420" src="https://embed.theblockcrypto.com/data/crypto-markets/prices/btc-price/embed" title="BTC Price" width="100%"></iframe><br /> </span></p> <p><iframe frameborder="0" height="420" src="https://embed.theblockcrypto.com/data/crypto-markets/prices/eth-price/embed" title="ETH Price" width="100%"></iframe></p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>