Posted by Xoken.org – The bitcoin halving which will occur in April is one of the most anticipated events in the world of blockchain and crypto.
Quoted from Yahoo Finance, written Tuesday (19/3/2024), there is a reason the Bitcoin halving is anticipated in the crypto world. One of them is that the price of bitcoin soared afterwards and this happened three halvings before. Seeing this, many investors predict the same thing will happen this time.
As a result, many investors plan to buy bitcoin before the halving. However, which other cryptos will benefit from the halving? These are a number of cryptocurrencies that have the potential to soar amidst halving sentiment.
While crypto prices are correlated with bitcoin to some degree, some of the top cryptocurrencies have historically shown higher than average correlations. If bitcoin is poised to experience a major breakout after the halving, it would be wise to look for other cryptos that are likely to join in.
The Motley Fool analyst team quoted from Yahoo Finance said it was difficult to ignore Ethereum (ETH), which is highly correlated with bitcoin. This correlation reaches 0.95 (1 is a perfect correlation).
However, after Ethereum fundamentally changed its blockchain architecture as part of the merge in 2022, the correlation between bitcoin and Ethereum began to decline.
In a note to institutional clients in April 2023, Coinbase Global discussed a change in correlation that had fallen from a 12-month average of 0.90 to 0.82. The paths of the two cryptocurrencies are considered to be deviating.
However, according to the crypto correlation matrix, it appears that the 12-month correlation has risen back to 0.89. This is understandable considering that bitcoin and Ethereum are both up 60 percent in 2024. Even if they don’t get a correlation close to 1, as was the case in Ethereum’s early days, most investors will probably get the same correlation.
Additionally, something to consider and identify is if the crypto is trading more than 50 percent below its all-time high price. This standard is considered to help identify cryptocurrencies that have more room to rally in the crypto market.