Does Liquid depend on Bitcoin? According to the correlation analysis, BTC and LQD have a very strong positive relationship. The correlation coefficient of their prices is 0.91, which was measured based on the last 100-days' price movements of both cryptocurrencies.
This coefficient may vary from -1 to 1, where -1 is the strongest negative correlation, 0 is no correlation at all and 1 is the strongest positive correlation.
The negative coefficient shows that the prices of the coins are moving in the opposite trend while the positive coefficient means that the prices are going in the identical trend. For example, if Bitcoin and Liquid connection is positively strong, it means that when BTC is rising LQD will rise as well. The negative strong relation will indicate that when BTC is growing LQD value will be in opposite decreasing.
The knowledge of the correlation coefficient helps to figure out in percentage the influence of Bitcoin over Liquid. If we take all the factors affecting the price of LQD as 100%, then the share of BTC price among these factors will be 82.81%. The other part which is 17.19% covers all the other things, such as news, technological releases or politics.