📊 1. Correlation Coefficient
Over the past three months, the correlation coefficient between AAVE and Bitcoin was around 0.94, indicating a very high correlation.
While over the last 30 days, their correlation was estimated between 0.85–0.94 according to various analytical sources.
➡️ This indicates that AAVE's movement largely follows the same path as Bitcoin, especially in the 12-hour time frame.
⏳ 2. Why does the correlation rise?
Market-wide volatility: When the market experiences strong movement either up or down, the correlation between assets increases, especially between BTC and DeFi tokens like AAVE.
Institutional capital and liquidity: Large liquidity inflows or outflows from Bitcoin transition to alternative currencies like AAVE.
🔍 3. What it means at the 12-hour frame
If Bitcoin rises from, for example, $100k to $110k, you are likely to see AAVE rise by a similar percentage within a certain number of hours following, provided there are no specific news updates about it.
Conversely, any correction in BTC's price will likely lead to a similar correction in AAVE, within a similar timeframe.
🛠️ 4. Practical tips:
You need to monitor the following indicators:
12-hour frame on TradingView: Compare the BTC chart against AAVE, and look for candle alignment (same trends and patterns).
Correlation indicator in TradingView: Directly shows the correlation over specified periods.
Market news: Even if internal news for AAVE emerges, its impact may be overshadowed by Bitcoin's movement if the market is in strong motion.
✅ Conclusion:
Point Result
Long-term correlation (3 months) ~0.94 (very high)
Short-term correlation (month) 0.85–0.94 (high)
Behavior on the 12-hour frame AAVE strongly follows BTC's movement
🔹 Conclusion: Yes, Bitcoin is the primary driver of AAVE's movement on the 12-hour frame. If BTC rises/falls, AAVE will almost certainly follow suit. For potential independent movements, specific news about AAVE or transactions within its DeFi network should be monitored.