The Spearman Correlation Coefficient assesses how well the relationship between two variables can be described using a monotonic function. It is very similar to the Pearson Correlation Coefficient: Pearson's correlation assesses linear relationships between datasets, Spearman's correlation assesses monotonic relationships (whether linear or not) between datasets. A perfect Spearman correlation of +1 or -1 occurs when each of the variables is a perfect monotone function of the other.
Lots of cryptocurrencies show positive correlations to Bitcoin which means that if Bitcoin moves up, those other cryptocurrencies also move up. It is easy to visualize how strong this correlation is using this chart. During bull runs and market cycle tops there are often short term money flows from one asset to the other. For example the Ethereum peak in early 2018 and 2021 followed shortly after Bitcoin's peaks (Report 1.84) which corresponded to a huge drop in the correlation coefficient on the 30D timeframe. Likewise it could be interesting to find alts that have negative correlation coefficients to Bitcoin during Bitcoin's bear markets. Video by Benjamin Cowen.
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