An overview of the trading activities on the cryptomarkets. Studies on traded volumes, supply and demand situations, as well as periodic technical analysis of the most important crypto-currencies and indices, including the perspective of professional Traders.
Good ol’ pairs trading. How often do we hear that “cryptos are extremely correlated!” or that “chen bitcoin goes up, everything goes up” … and vice versa? But is this always the case?
Correlation between SUSHI and XRP
Traditionally, most investors view their investments and trades in terms of absolute returns. In other words, if you buy something, and it increases in value, there is a chance that you will make a profit. And if it decreases in value, there is a risk of loss. Let’s have a look at two specific coins: SushiSwap (SUSHI) and Ripple (XRP).
Nice, right? Under the percentage view, they seem to move in locksteps, but with some deviations. When two-time series are cointegrated, and the spread between the two deviates “too much” from its long-run value, we can bet on a reversal.
That is the answer: buy when cheap and sell when expensive and then wait for the convergence. After some calibration, testing, and math, we entered into the following trade: sold SUSHI and bought XRP. Let’s see what happens!
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