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This dashboard is to find out the volatility of the prices of ETH and LUNA.
Although the price volatilities of ETH and LUNA are not correlated to each other, it was found out that the price ETH and LUNA are closely related to each other, despite the fact that a decorrelation happened near the end. The decorrelation may be explained by the fact that LUNA's price increase lasted a little bit longer due to its smaller market cap.
To find out what's causing the drop in correlation, the ETH vs LUNA price was plotted out. From the graph below, we can see that the correlation drops when LUNA's price continued to climb even when the price of ETH stopped climbing. The possibility of decorrelation of the prices of ETH and LUNA may be caused by the rise of price in ETH. The rise in price of ETH, being the market leader, shows confidence in the overall cryptocurrency market, and with it, the price of LUNA goes up in unison. However, with LUNA having a lower market cap, the price increment lasted slightly longer, causing the decorrelation.
So are there any correlation at all between the top 2 cryptocurrency and LUNA in terms of price action? To find out, the Pearson correlation coefficient was found out between the price of ETH and LUNA. From the graph below, it was found out that the prices are highly correlated with each other for about a week. However, the correlation drops to below 0.5 in the later dates, even to a low number of 0.04.
In order to verify that there is no correlation between the volatility of ETH and LUNA, the correlation function was used on the 14-day data. The result shows a mere 0.06 Pearson correlation coefficient for the price volatilities. Since Pearson correlation coefficient ranges from 1 to -1 with 0 being no correlation, we can safely say that the price volatility of ETH and LUNA are not affected by each other.
The world of crypto is a volatile place, where price swings of +-10% per day are not uncommon, but are the volatilities of these price swings related to each other? This dashboard finds out the relationship between the volatility of ETH and LUNA.
The graph below shows the volatilities of ETH and LUNA, based on their hourly prices. From the graph, we can see that the standard deviations of ETH price are between 11 and 66, while the standard deviations of LUNA's price ranges from 0.06 to 0.54. This is expected as price per ETH is much higher than the price per LUNA. However, there seems to be no correlation between the volatility of ETH and LUNA.