The rolling 60-day correlation between Bitcoin and Ether has fallen below its 70% average for the first time in three years, indicating a notable shift in the relationship between the two major cryptocurrencies.
This drop in correlation, last observed in early 2021, suggests that Bitcoin and Ethereum prices are not moving as closely in sync as they have in recent years. The change coincides with the launch of spot Bitcoin ETFs in the U.S., prompting speculation about potential spot Ether ETF approvals from the Securities and Exchange Commission.
The correlation shift aligns with the introduction of Bitcoin spot ETFs, highlighting a divergence in price activity between the two cryptocurrencies. Bitcoin has seen increased momentum fueled by ETF hype, while Ether has undergone a comparatively slower rally.
Despite various narratives surrounding Ethereum, such as deflation, ultrasound money, Layer 2s, liquid staking derivatives, re-staking, and upcoming developments like danksharding, the potential approval of spot ETFs is currently considered the most influential narrative.
While Ether spot volumes on centralized exchanges surged to their highest level since the collapse of FTX, derivatives markets have not shown indications of traders gearing up for a rally. Despite expectations for a potential spot ETF this year, Ether futures ETFs have experienced a few slow months of trading, according to data from Kaiko.
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