Bitcoin (BTC) Shows Slight Rebound, But Correlation with Altcoins Remains a Market Focus

Bitcoin [BTC], after experiencing a sharp decline earlier this week as it dropped by more than 10% within just two days, has shown a slight rebound over the past 24 hours.

Bitcoin [BTC] began the week on a concerning note, dropping sharply by over 10% in just two days. However, the past 24 hours have seen a slight recovery in BTC’s price. During this period, Bitcoin’s price has increased by 0.5%, approaching the $60,000 mark.

Despite this minor recovery, the asset remains down by 2.3% over the past week, reflecting a market still in flux. This price movement has sparked discussions among analysts, with particular focus on the correlation between Bitcoin and various altcoins.

As Bitcoin continues to navigate a fluctuating price performance, a recent report by CryptoQuant analyst Joao Wedson highlights the strong correlation between Bitcoin and altcoins.

According to Wedson, the current positive correlation suggests that altcoins are closely following Bitcoin’s price movements, indicating an alignment in the broader crypto market.

This behavior reflects investor confidence, as the synchronized movement suggests a level of stability in the market. However, the report warns that a shift to a negative correlation could serve as a red flag for Bitcoin and the market at large.

Historically, a negative correlation occurs when altcoins significantly out-perform Bitcoin, often leading to a subsequent drop in BTC’s price.

This pattern was evident in January, June, and July of 2024, where altcoins outpaced Bitcoin, only for the market to experience a significant downturn shortly afterward.

Currently, altcoins such as Bancor (BNT), Axie Infinity (AXS), Chainlink (LINK), Algorand (ALGO), and Cardano (ADA) exhibit the highest correlation with Bitcoin, meaning their prices are moving in tandem with BTC.

In contrast, altcoins like Dash (DASH), Curve (CRV), dYdX (DYDX), Binance Coin (BNB), and MyNeighborAlice (ALICE) show lower correlation levels, indicating a more independent price movement.

Despite these variations, the overall positive correlation across altcoins suggests a market moving in unison with Bitcoin, signaling potential short-term stability. However, continuous monitoring is essential to detect any deviations that might signal increased risk.

Cardano [ADA] has followed a trajectory largely mirroring Bitcoin’s price movements this week. Earlier in the week, ADA’s price dropped significantly, reaching a low of $0.34. Howeverгореючий, in the past 24 hours, ADA has shown signs of recovery, with its price rising by 2.8%. This recovery aligns with the broader market’s trend of slight rebounds following initial sharp declines.

While ADA’s price dropped, its fundamentals indicate growing interest from large investors. Data from IntoTheBlock reveals a surge in large transactions—those greater than $100k—reaching nearly 4,000 as of today, a sharp increase from below 3k transactions recorded last week.

This suggests that larger investors are taking advantage of the lower prices to accumulate ADA. In contrast, data from Santiment shows a decline in ADA’s number of active addresses over the past month, dropping to below 500k—a significant decrease from nearly 1 million addresses in March.

This decline in active addresses could reflect reduced retail investor activity, even as whales continue to engage with the asset.