In cryptocurrency algorithmic trading, pairs trading is a method of trading based on reading the market in lines of correlated assets. Every exchange offers a certain number of cryptocurrency trading pairs:
The variety of pairings in crypto trading is one of the things that distinguishes it from traditional trading. Now, beyond just exchanging one asset for another, you are going to want to do your research and look at historical performances.
Here is a CoinMetrics chart showing the historical performances of ETH and BTC side by side:
If you are looking to engage in crypto pairs trading you have to find the performance average that two assets share. If, based on the data, you believe there is a correlation between two assets, what you are looking for is the mathematical key to their relationship. Once you have found this key, when there is diversion from the average, you can use it to go short on the overperforming token and go long on the underperforming to make a profit.