It is no secret that Ethereum’s performance has been tamed compared to Bitcoin since the start of this cycle. However, this trend was most apparent at the beginning of the year when ETH prices fell towards $3,000, while BTC continued to move sideways above $100,000.
When Bitcoin prices eventually lost the $100,000 level in the first quarter, Ethereum’s value had already fallen nearly $2,000. The best cryptocurrencies have reached a new all-time high these days, but the “King of Altcoin” faces serious resistance of around $2,800.
Will divergence lead to a reevaluation of your investment strategy?
The rate of price growth for assets in both the past weeks and months provides insight into the decline in the relationship between Bitcoin and Ethereum. In a recent Quicktake post on the Cryptoquant platform, on-chain analyst Carmelo Aleman shared that separation occurred between the two biggest cryptocurrencies in the world.
Aleman defined the correlation in his post:
Correlation is a statistical measure of the relationship between two variables. Financial analysis can help you determine whether two assets tend to move in the same direction (positively correlated), opposite direction (negatively correlated), or independently (near zero).
Historically, Bitcoin and Ethereum have always maintained a strong positive correlation – usually above 0.7. This long-term trend explains why most of the BTC movements have been often reflected by Ethereum prices over the past few years.
Source: CryptoQuant
However, Aleman pointed out that since the start of this year, there has been a segregation between the top two assets. Data from the BTC-ALTS correlation matrix (annual) show that the correlation was 0.63 on January 1, 2025, then fell to 0.05 by May 22, 2025.
Source: CryptoQuant
From an investment perspective, this large divergence breaks one of the most consistent patterns in the crypto market, leading to a reassessment of strategies based on the correlation between Bitcoin and Echo. “It also adds uncertainty to investors who can no longer expect ETH to follow the BTC,” Aleman added.
On-chain analysts said:
Portfolio models, risk strategies, and return forecasts need to be adapted with this. This could also reflect how Ethereum is driven by its own internal factors, such as protocol upgrades, regulations, or defi, which demonstrate increased independence.
Aleman also said the shift would mean that ether and associated assets would be at a higher risk of missing out on bull markets. This effect is mostly seen in 2025 when Bitcoin prices rose, but the value of ETH and other Ethereum-related altcoins is often stalling or fading.
Bitcoin and Ethereum prices
At the time of this writing, Bitcoin and Ethereum are valued at around $107,450 and $2,507, respectively. BTC prices have risen by more than 5% over the past week, while ETH values have risen by less than half that over the same period.
The price of BTC against ETH on the daily timeframe | Source: BTCETH chart on TradingView
ISTOCK featured images, TradingView chart
