Cryptocurrency Correlation Analysis - README

Overview

This project analyzes the relationships and correlations among three major cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE). The analysis is based on datasets sourced from Kaggle, with a focus on price movements, trading volumes, market dominance, and volatility trends. A significant part of the analysis involved Phyton and SQL for merging, cleaning, and querying the data to uncover patterns and correlations between these assets.

Hypotheses

	1.	Bitcoin Price Movements Impact Other Cryptocurrencies
        	Significant price drops or increases in Bitcoin lead to similar trends in other major cryptocurrencies like Ethereum and Dogecoin.
	2.	Bitcoin Trading Volume Influences Other Cryptos
        	Increases in Bitcoin’s trading volume are followed by increases in the trading volumes of other cryptocurrencies.
	3.	Decreasing Bitcoin Market Dominance
        	Bitcoin’s market dominance has decreased over time, with Ethereum and Dogecoin gaining more market share.
	4.	Bitcoin’s Lower Volatility
        	Bitcoin shows lower volatility compared to other cryptocurrencies, particularly Dogecoin.

Data Sources

We used three datasets from Kaggle:

	•	coin_bitcoin.csv
	•	coin_ethereum.csv
	•	coin_dogecoin.csv

These datasets were merged and cleaned for further analysis in SQL and modularized in Python.

Key Findings

		Volume Correlation: 
	• 	There is a notable correlation between the trading volumes of Bitcoin and other cryptocurrencies.
		However, Dogecoin exhibited more extreme changes due to its higher volatility.
		Market Diversification:
	•	The dominance of Bitcoin has decreased over time, reflecting a more diversified cryptocurrency market.
		
		Volatility and Investment Risk:
	•	Bitcoin is relatively less volatile than other cryptocurrencies.
	•	Dogecoin is more volatile, offering higher potential short-term gains but also greater risks.
	•	Investors seeking stability should consider allocating a larger portion of their portfolio to
		Bitcoin and Ethereum while balancing riskier investments like Dogecoin.

Presentation Url: https://docs.google.com/presentation/d/1A40pjKiK_zTObghs-92OotXCVl-PKVv9fSRqcHs-Qvs/edit#slide=id.g307fb920164_1_4