
BTC and ETH Divergence Predicts Market Declines in 85% of Cases
Since the second half of April, the prices of Ethereum and Bitcoin have diverged by 12%. While the ETH price traded sideways for the first ten days of May, the BTC price continued to rise steadily. Following a minor correction in the price of Bitcoin, the market capitalisation of Ethereum dropped by 10%.
A similar situation occurred in late January, when the resulting divergence in prices foreshadowed a 20% drop in BTC. Analysing data from 2020 onwards reveals that Ethereum’s declines amid Bitcoin’s growth have served as a leading indicator in 85% of cases.
Crypto investors often shift their holdings to BTC when fundamental forecasts are negative. While this does not prevent Bitcoin from declining under pressure from external circumstances, the loss in market capitalisation is lower than that of altcoins.
A divergence signal between BTC and ETH merely indicates a likely decline, rather than predicting a trend reversal. Bitcoin has passed the low point of the crypto winter and is now in a global growth cycle driven by the 2028 halving event.