Analysis of Ethereum And Binance Token

The son of bitcoin otherwise known as ethereum has been on a thousand dollar plus price since the recovery of bitcoin from the dump.

This article will examine what type of relationship exist between ethereum and binance token.

Objectives Of The Study In the course of this article, I shall tend to cover the following subtopics under correlation test.

Introduction to analysis of correlation. Categories of correlation Importance of correlation test. Summary of relationship direction Data collection of prices of bitcoin and other tokens from coingecko.com Analysis and interpretation Conclusion

Introduction to analysis of correlation Analysis of correlation examines what type of relationship exist between variables. Example of the variables refered to in this article are the price of ethereum and that of binance token. The strength of relationship is indicated by a correlation coefficient “r”.

Categories of relationship The result of analysis of correlation must be any of the following result.

Positive correlation A positive correlation between ethereum and binance token indicates that as the price of ether is in a bullish state, the same state will be experienced in bnb at same rate and vice versa. The direction of this relationship tends towards a positive 1 axis.

Negative relationship A negative correlation between ethereum and binance token indicates that as the price of ether is in a bullish state, the price of bnb will be in a bearish state and vice versa.
The direction of this relationship tends towards a negative -1 axis.

Zero relationship A relationship that approaches 0 or its zero in indication entails that there is no relationship between the price of ethereum and binance token. This type of relationship tends to 0 axis. Importance of correlation test..

The following are the importance of the analysis for investors in the cryto market.

This test will prove if ethereum has influence on binance token.

It examines the direction of relationship exist? It is also essential to indicate the strength of relationship if it’s a weak one or a strong one bonding.

Summary of relationship direction

For a positive relationship r = 1 or tends towards a positive 1 axis. For a negative relationship r = -1 or tends towards a negative 1 axis. For zero relationship r = 0 or tends towards the zero axis. Data collection of prices of bitcoin and other tokens from coingecko.com I shall attempt to collect data from coingecko.com as regards the price of ethereum and that of binance token for the period of June 4 – July 1st, 2022. The price of ethereum as seen is the second variable and that of binance token is the third variable..

The variable view mode of the price collection is seen below.

The data view mode of the price collection is seen below

Scatter dot diagram It is essential to run a scatter plot diagram to visualize the direction of relationship.

From the scattered diagram, there is a perfect positive relationship between both tokens.

Let's view the strength of the relationship by carrying out correlation test.

Result

The result of the analysis is presented below. The analysis of relationship between ethereum and binance is very high. With a coefficient of 0.972 indicates that as the price of ethereum pumps, the price of binance pumps at same rate. This type of relationship is a positive and strong one.

Maximum and minimum price of both tokens The maximum and minimum price of both tokens are seen below

Conclusion In conclusion, ethereum is correlated with binance token in the crypto market.

Reference Photos taken by me