If you follow the crypto market, you may already be familiar with the **strong direct correlation between cryptocurrencies prices**, native or tokenized. When BTC goes down, pretty much everything goes down with it, and when BTC is up, everything is most likely to go up too. This correlation isn’t exclusive to BTC, impacts on the price of many other cryptocurrencies (such as ETH) also reverberate across a wide range of crypto assets, with different degrees of strength among them.
In the following blog post I analyze how **DEX pairs**, as popularized by Uniswap, contribute to the intrinsic correlation between crypto assets, and demonstrate how a BTC trade can indirectly rise the price of ETH within a simulated closed system of DEX pairs:
And to complement the discussion, in your experience what would you list as additional sources of correlation in DeFi?