Correlations among major cryptocurrencies like Bitcoin, Ethereum, Solana, and others appear to have been elevated in recent weeks as of mid-December 2025, aligning with broader market trends.
High correlations often occur during periods of market stress or consolidation, when investors treat crypto as a single risk asset class rather than differentiating between individual projects.
Bitcoin dominance has been rising hovering around 57-60% in recent data, meaning BTC is outperforming or falling less than most altcoins. This typically signals a “flight to safety” within crypto, where capital rotates into Bitcoin, causing majors to move more in lockstep often downward or sideways together.
The Crypto Fear & Greed Index is in Extreme Fear territory recent readings around 16-27, with some days as low as 21. Extreme fear has dominated over 30% of the past year’s readings, reflecting caution after Bitcoin’s ~30-36% drawdown from its all-time high.
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In fearful environments, correlations spike because panic selling hits the entire market. Major coins have shown tightly linked price action: Bitcoin dipped below $90K recently amid thin liquidity and macro caution (e.g., ahead of U.S. data releases), pulling Ethereum, Solana, and others lower.
Longer-term rolling correlations e.g., SOL with BTC/ETH around +0.7 remain strong, and BTC’s correlation with risk assets like stocks has strengthened this year. This isn’t entirely “unusual” in a historical sense—crypto correlations frequently approach 1 during corrections—but it stands out if compared to periods of altcoin outperformance earlier in cycles.
The maturing market with ETFs, institutional flows, and ties to equities has made synchronized moves more common overall.If this persists, it could limit diversification benefits in crypto portfolios short-term, but extreme fear has historically preceded rebounds when sentiment shifts.
Historical Trends in Cryptocurrency Correlations
Cryptocurrency correlations—particularly between Bitcoin (BTC) and major altcoins like Ethereum (ETH), Solana (SOL), and others—have evolved significantly since the market’s early days.
Overall, correlations have trended higher over time as the asset class matures, with institutional adoption, ETFs, and shared macro influences (e.g., interest rates, risk sentiment) causing more synchronized movements.
Early Years (2013–2017): Bitcoin dominance started near 100% and declined as altcoins emerged (e.g., Litecoin, Ripple). Correlations were lower during altcoin booms, but BTC often led rallies. In bull markets like late 2017, altcoins outperformed, reducing correlations temporarily.
During the 2018 crash, correlations spiked as panic selling hit the entire market similar to stocks in crises. BTC dominance rose above 70% at times. In 2020’s “DeFi Summer,” ETH and DeFi tokens decoupled somewhat, lowering correlations briefly.
2021 Bull Peak: High correlations (BTC-ETH often >0.90) during the rally, but altcoins surged in “altseason” phases, with BTC dominance dropping to ~40%.
2022 Bear Market: Correlations approached 1.0 amid contagion (e.g., FTX collapse), with BTC seen as a “flight to safety.”
2023–2024: Post-Ethereum Shanghai upgrade, BTC-ETH correlation declined temporarily from 0.95 to ~0.82 due to ETH-specific narratives (e.g., staking, DApps). However, it remained strong overall 0.70–0.90 for majors. BTC dominance stabilized around 50–60%.
As of mid-December 2025, correlations elevated again during recent corrections, with BTC dominance ~57–60%. Altcoin correlations to BTC slipping slightly in some periods, signaling potential rebounds, but still high amid fear.
Studies show correlations often increase during downtrends and decrease during uptrends when altcoins shine on unique catalysts (e.g., ETH upgrades). The flagship pair (BTC-ETH) has shown rolling correlations fluctuating but trending upward.
Often 0.70–0.95+ in recent years. Spikes near 1.0 in stress; dips on ETH-specific events. Heatmaps reveal most majors cluster tightly with BTC, especially in recent years.
These trends highlight that while diversification within crypto was easier in earlier cycles, high correlations now limit it—especially short-term. Extreme fear like recent weeks often precedes shifts when sentiment improves.