Analysis Of Bitcoin And Ethereum Dip Rate Using SPSS (Btc Vs Eth)

Bitcoin fell drastically down to $20k in June, however many predicted due to the fact it rose upto $69k at its maximum all time high, it may no longer experience a dip but as at the time of writing this article, bitcoin currently worth over $20,755k .

This article seeks to find out for if there is still a relationship between bitcoin and ethereum. Could it be that as bitcoin is falling drastically ethereum is also falling at same rate?

This question shall be answered when we consider the analysis of relationship between both tokens.
In the course of this article, I shall tend to define what analysis of relationship is all about and the theories behind it, collection of prices of both tokens from coin gecko and analysis in the SPSS software.

What is correlation analysis?
Correlation analysis is a test that identifies how related variables are. The type of relationships answers the question if an increase in one variable will lead to increase in the other or vice versa. It was invented by a statistician named Karl Pearson.

The following theories attached with correlation relationship are;

Positive relationship
A positive relationship is a type of relationship that indicates an increase in the price of bitcoin will lead to increase in the price of ether and vice versa. Hence the relationship tends towards positive one axis.

Negative relationship
A negative relationship indicates that as the price of bitcoin falls, the price of ether goes high. it tends towards a negative one axis.

Zero relationship
A zero relationship indicates that there is no relationship between the price of bitcoin and that of ethereum. It tends towards zero axis.
It can be summarily interpreted or understood using a number line scaling system as shown below.
-1-------------------0------------------+1

Why is correlation test important?

It is important as it helps to understand the relationship between both variables.

It is important because it provides the efficacy of the relationship. i.e if it’s a weak one or s strong one, maximum or minimum.

It helps crypto investors make good decision.

We shall proceed to collection of data of the prices of bitcoin and that of ethereum using SPSS application software. This is the recommendable software used for statistical data analysis.

The variables in consideration are eth and btc considering the duration of June 2nd , 2022 – June 16, 2022.

To identify the nature of relationship, we shall view the scatter plot diagram of the prices of both tokens. The scatterplot diagram can be seen below.

From the scatterplot diagram there seem to be a positive relationship between both tokens.
As the general dip affects bitcoin crypto, it also affects ethereum. Now lets measure at what rate does both token fall.

This can be done by carrying out a correlation analysis test, Analysis of correlation has shown below that as bitcoin climbs, the ether token climbs but as we are in the dip the ether token is falling at a equal rate with coefficient of 0.8.

As bitcoin drops, the price of ether also drops at same rate.
The price of ethereum before the week rums out may likely hit 1k dollars. As bitcoin will also find its way to 10k dollars soonest.