Bitcoin (BTC) price reached a new 2022 high on Feb. 13, 2022, crossing $x,497 following a 42% gain since the start of the yr. This appreciation in cost has led crypto analysts to propose that a new balderdash run is in its early stages and some approximate that the price volition reach a new best high at $27,000 by summer. Other analysts believe the cost will reach the coveted $100,000 mark right earlier the start of 2022.

Cryptocurrency market daily overview. Source: Coin360

Cryptocurrency market daily overview. Source: Coin360

Aslope Bitcoin's price gain, altcoins take been surging as well. Over the past week NEM and Tezos (XTZ) posted amazing double-digit gains, raising the idea that altcoins and Bitcoin bull periods may be correlated.

Let's investigate whether this correlation exists during bullish and bearish market conditions.

Altcoin correlation during Bitcoin bullish periods

Bitcoin underwent a potent bullish trend from April 2022 to June 2022, producing a more than 200% return and reaching $13,800 in June. 26, 2022. Drawing the correlations betwixt Bitcoin and the top thirty cryptocurrencies in the marketplace today, nosotros find that (58% of cryptocurrencies show correlations that are college than sixty% confronting Bitcoin in such periods.

A correlation of 0% means that the currencies are not correlated in whatever style, while 100% ways the currencies are fully positively correlated. Additionally, a correlation of -100% means the currencies are fully inversely correlated.

The most notable currencies correlated with Bitcoin are Ether (ETH), Dash, Bitcoin Cash (BCH), Monero (XMR) and EOS with correlations between 74% and 82%. On the other side, USD Coin (USDC) has the lowest correlation from all currencies, with a negative human relationship (-4.3%), followed by HedgeTrade (HEDG) with a 13.3% correlation.

Currencies like Chainlink (LINK), Cosmos (Atom), Crypto.com Chain (CRO) and Huobi Token (HT) likewise show a low correlation with Bitcoin – betwixt 20% and 30% - during this period.

Correlation between Bitcoin and altcoins from April-June 2022.

Correlation between Bitcoin and altcoins from April-June 2022.

Correlations during altcoins bullish periods

During altcoins bullish periods like the one observed between Dec 2022 and March 2022, the correlations between the tiptop currencies and Bitcoin are stronger across all cases except for USD Coin, which is slightly more negative than during Bitcoin's bullish catamenia (-7.8%).

However, 77% of the top currencies correlate at more than lx% with Bitcoin and Monero is the highest correlated at 92.3%. Furthermore, Dash, EOS, Ethereum, XRP and ZCash (ZEC) are all correlated with Bitcoin above 87%.

Bitcoin SV (BSV), Chainlink, Huobi Token, and Tezos are correlated betwixt 50% and 60% with Bitcoin during this menstruum. Additionally, Tether (USDT) shows the second lowest correlation with Bitcoin (19.1%) during this period, followed past Crypto.com Chain (25%).

Correlation between Bitcoin and altcoins between December 2022 and March 2022.

Correlation betwixt Bitcoin and altcoins between December 2022 and March 2022.

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Bitcoin has signaled that a bullish scenario could play out throughout 2022 and since the start of 2022 the digital asset has gained more than 35%. During this period, consistently high correlations are seen every bit was previously the case with large-cap altcoins such as Bitcoin Greenbacks, Ethereum, Litecoin (LTC), NEO, TRON (TRX) and XRP.

On the low correlation side, both USD Coin and Creation prove consistent results between the last bullish catamenia and the starting time of 2022.

However, Chainlink, Crypto.com, HedgeTrade, Huobi Token and Nuance now show conflicting correlations with Bitcoin between the last bullish period and this prevents one from concluding that in that location is any consistent behavior between these currencies and Bitcoin.

Correlation between Bitcoin and altcoins from Jan. 1, 2022-Feb. 4, 2022.

Correlation between Bitcoin and altcoins from Jan. 1, 2022-Feb. 4, 2022.

Under Bitcoin and altcoins bullish scenarios, stable coins show the lowest correlation with Bitcoin, while larger currencies such as Ethereum, Litecoin, Bitcoin Cash, NEO, Monero and XRP are always highly correlated with Bitcoin'south beliefs. Still, the altcoins studied in this commodity are much more correlated with Bitcoin when a bullish altcoin period occurs in comparison to when Bitcoin's cost action is bullish.

Looking frontwards, if a new Bitcoin bullish period begins, investors may consider these altcoins every bit the ones to accumulate as they offering higher upside potential. Furthermore, investors who only purchase Bitcoin might adopt a more bourgeois approach and hedge the riskier Bitcoin investment with a larger allocation into stable coins or currencies that evidence a lower correlation with Bitcoin during these periods.

The views and opinions expressed here are solely those of the author and do non necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should carry your own enquiry when making a decision.