Bitcoin (BTC) advanced by 10.12% this week and is trading near the ballpark figure of $23,000. It is up by over 0.80% at the time of writing.
Ether (ETH) prices roughly fell by 2.55% on Friday.
But in the past 24 hours, EOS, Bitcoin Gold, and Ethereum Classic, is a leading list of gainers while printing 10.5%, 8.8%, and 6.7% gains respectively.
While in the top 20 coins by market cap, Decentraland (MANA) and Cosmos (ATOM) and winning the race with 5.25% and 3.60% respectively.
Loopring (LRC), Polygon (MATIC), and Solana (SOL) are all forming the list of heavy losers among the top 20 with each of them losing above 3.4%.
Bitcoin is Decoupling
The decoupling event in Bitcoin has begun with falling correlation reading and increasing anti-drill against the US equities. As noted, the 90-day correlation between Bitcoin and S&P 500 stood at 0.96. While the current correlation reading for the last 30 trading days has noted 0.78 on the correlation coefficient scale.
Thus, 0.78 might imply a strong relationship between the two assets, the shrinkage is indicative of the independent trading of the two.
BTC and ETH are outperforming the long-established asset classes for the week. While on the YTD performance, they are still catching up on the trail.
There’s a conspicuous shift in correlations while juxtaposing 90-day and 30-day correlation readings.
For the scene, the correlation coefficient is a measure of the strength of the relationship in price movements of different asset classes.
A correlation reading close to 1 indicates a strong relationship between assets, while a correlation of zero indicates no relationship.
Moreover, a correlation of -1 indicates a complete inverse relationship.
While BTC and ETH remain strongly correlated to each other in the last 30 trading days (and will likely continue to be), the correlation between cryptocurrencies and long-established assets is beginning to return to levels that signal decoupling.
The Funda of Funding Rates
An important indicator known for gauging the price of Bitcoin is Funding Rate. In explanation, funding rates represent payments to short and long traders.
They can near real reflection of trading sentiment within futures markets. When funding rates are above 0, investors often view this as bullish in nature. But, when funding rates are negative, investors view this as bearish.
As noted in July, BTC funding rates have been positive every day in July, except the 1st, 10th, and 15th of July.
For the week ahead, it is important to keep an eye on FOMC meeting updates for Wednesday of next week. The developments in the recent hawkishness have led to the hikes in interest rates to combat the 40-year high inflation rates. Thus, the expected rate of increase this month can be around the ballpark figure of 75 basis points again.