Rare BTC-ETH Divergence Sparks Caution, Says VanEck Analyst

A unusual market phenomenon has captured the interest of crypto traders whereby Bitcoin ( BTC ) declined more than 10 percent in a single day but Ethereum ( ETH ) avoided the same slippage. In line with VanEck analyst Matthew Sigel, this was only the 52nd time since 2020 – or approximately 2.7% of days that it has trading – and the first occasion in 2021. The past performance indicates that ETH due to the effects of history may experience short term returns as BTC undergoes pressure.

It goes without saying that later after such divergences, BTC performs poorly with the median returns of -2.8% over a period of seven days and -15.6 over a period of thirty days as shown by the figures presented by Sigel. On the other hand, H shows a positive snapshot, at a median of +6.4% over seven days and is negative towards the longer thirty day figure at -8.4%. This would suggest that ETH could prove to be resilient in the short term whilst the overall market stands the chance of a decline.

Market and Volatility Factors

Matthew Sigel, best known as the crypto expert who predicted that BTC will reach 100K by 2024, reads the divergence as a bullish factor in the broader crypto market. Although having some residentially displayed short-term potential, Sigel cautions that any long-term recovery could be hurt by the macroeconomic forces of trade tariffs in the U.S. and the tightening of monetary policy globally.

The total crypto market capitalization just fell a bit to the level of $3.4T since an increasing number of investors are becoming very cautious. The level of leverage, margin requirements, and BTC liquidation caused by algorithmic trading are persuasive factors that contributed to BTC downfall. In the meantime, ETH seems to have received a capital rotation trading, institutional desire, and an increase in staking incentive demand.

This is divergence following current trade policy changes and speculations regarding the further rate increase. Investigations in 20222024 propose that macro shocks regularly increase outflows in crypto and implied so in the big plunge of BTC compared to the comparative easiness of ETH. Institutional participants might view ETH as a short-term hedge but both coins are at risk should the bearish trend continue.

Strategic Takeaways

As traders, paying attention to BTC support line at approximately 110K, and resistance level in ETH around 3.2K to 3.3K will be important. Transaction history data on platforms such as Bitgo and Bitmine can pin down whether it is the whales accumulating more or selling pressure increasing. Despite the short-term bullish outlook ETH represents, the following period can be tumultuous according to Sigel at least through the end of Q4 2025.