In recent weeks, Bitcoin has recorded impressive gains – since the beginning of April, it has risen by nearly 28% from its local lows. Ethereum has also seen a solid rebound, though slightly weaker – its value has increased by around 27%.
Despite the similar scale of short-term gains, Ethereum is clearly underperforming compared to Bitcoin in a broader context. Since the start of the year, the second-largest cryptocurrency has been sold off much more heavily. While Bitcoin is holding near its all-time highs, Ethereum is still over 62% below its record peak.
The current situation is also interesting for another reason – we are seeing a sharp drop in the correlation between Bitcoin and Ethereum, which has coincided with a strong surge in BTC’s price. This setup has occurred only twice before – at the start of the current bull run, in 2023 and 2024. In this analysis, we assume a drop in correlation below 50% over the past two months, along with a Bitcoin increase of at least 15% over the last 30 days.
In both previous cases, Ethereum quickly caught up with Bitcoin, gaining significantly within a month of such a divergence appearing. Therefore, if there is no sharp sell-off in the crypto market or in the broader financial environment, and if Bitcoin continues to rise, Ethereum has a strong chance for a more powerful rebound.
However, it’s important to remember that the current macroeconomic and geopolitical environment remains highly volatile. If sentiment worsens, Bitcoin’s rally could quickly stall, and Ethereum may drop to new local lows. Regardless of the scenario, the current decoupling of BTC and ETH correlation combined with Bitcoin’s dynamic price increase is a rare phenomenon and worth the attention of investors tracking the cryptocurrency market.
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