We analyze the changes in the correlation between Bitcoin and Ethereum that could have serious implications for the crypto market.
Decline in BTC and ETH Correlation
According to the cryptocurrency correlation matrix, the correlation between BTC and ETH has plummeted from 0.63 on January 1 to just 0.05 as of May 22, 2025. This indicates a significant decoupling between these two largest cryptocurrencies, which previously moved in sync.
Implications for the Crypto Market
CryptoQuant analysts pointed out that this shift breaks one of the most consistent patterns in the crypto market. As a result, traditional investment strategies may require reevaluation. It also indicates that Ethereum is becoming more influenced by internal factors, such as protocol upgrades and regulatory changes.
Ethereum's Challenges Amid Independence
Despite this independence from Bitcoin, it may come at a cost for Ethereum. While Bitcoin has surged in 2025, ETH and its Layer 2 ecosystem have shown underperformance. This trend has increased uncertainty among investors and raised concerns about Ethereum's positioning in future bull markets.
The sharp decline in correlation between Bitcoin and Ethereum could change the investment approach in cryptocurrencies. This event requires a reassessment of strategies for both retail and institutional investors.
