Bitcoin and Ethereum decoupling reach historicity – what this means for investors
It’s no secret that Ethereum’s performance has been tamed compared to Bitcoin since the beginning of this cycle. However, at the beginning of the year, when ETH’s price dropped to $3,000 and BTC continued to move to the side more than $100,000, the trend became most obvious.
When the Bitcoin price eventually lost $100,000 in the first quarter, Ethereum’s value had fallen by nearly $2,000. While the major cryptocurrencies have reached new all-time highs in recent days, the “King of Altcoins” faces obvious resistance of about $2,800.
Will the differences lead to a revaluation of investment strategies?
Price growth rates for both assets have insight into the decline in the relationship between Bitcoin and Ethereum over the past few weeks and months. In a recent QuickTake post on crypto platforms, Chain analyst Carmelo Aleman analyzed that decoupling has occurred between the two largest cryptocurrencies in the world.
Alerman defines relevance in his post:
Correlation is a statistical measure of the relationship between two variables. In a financial analysis, it helps determine that two assets tend to move in the same direction (positive correlation), opposite direction (negative correlation), or independently (negatively close to zero).
Historically, Bitcoin and Ethereum have always maintained a strong positive correlation – usually above 0.7. This long-term trend explains why most of BTC’s movement is often reflected in the prices of Ethereum over the past few years.
Source: CryptoQuant
However, Alman noted that there has been a decoupling between the first two assets since the beginning of the year. Data from the BTC-ALTS correlation matrix (years) show that by January 1, 2025, this correlation was 0.63, and then fell to 0.05 by May 22, 2025.
Source: CryptoQuant
From an investment perspective, this significant difference breaks one of the most consistent patterns in the crypto market, resulting in a re-evaluation of strategies based on Bitcoin-Essem correlation. “This also increases uncertainty among investors who no longer expect ETH to follow BTC,” Aleman added.
Chain analysts said:
Portfolio models, risk strategies and return predictions must now be adapted. This may also reflect how Ethereum is driven by its own internal factors such as protocol upgrades, regulation, or Defi, indicating growing independence.
Aleman also mentioned that this shift means that the risk of ether and related assets increases the risk of missing out on the bull market. This impact has risen in 2025, while the value of ETH and other Ethereum-related altcoins often stagnate or decline.
Bitcoin and Ethereum Prices
At the time of writing, Bitcoin and Ethereum are worth $107,450 and $2,507, respectively. Although BTC prices have risen by more than 5% over the past week, ETH is worth less than half of the same period.
The price of BTC against ETH on the daily timeframe | Source: BTCETH chart on TradingView
Featured images from Istock, charts for TradingView
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