Ethereum lags Bitcoin and has more room to maneuver if US dollar weakness persists.

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Major cryptocurrencies started 2023 with positive momentum Bitcoin, Doge, Ripple and Ethereum move in direct correlation Ethereum has more room to rally

The cryptocurrency market started 2023 with positive momentum. As a result, all major cryptocurrencies gained against the US dollar and the so-called “crypto winter” of 2022 disappeared.

Bitcoin is clearly the leader. It has rebounded strongly from the 2022 lows after losing around -65% of its value. The direct correlation between Bitcoin and the rest of the cryptocurrency market is well known, but something interesting has happened since the start of 2022.

Specifically, the correlation has weakened. Sure enough, other cryptocurrencies follow when Bitcoin enters a bull or bear market. Only this time the magnitude is different.

ETHUSD Chart by TradingView

Ethereum lagging behind

The chart above shows the four major cryptocurrencies and their performance against the US dollar – Bitcoin, Doge, Ripple and Ethereum. The correlation is obvious, but Ethereum is lagging behind.

In 2022, Ethereum fell the most. It lost over -70% of its value before the recent rally.

Although it recovered in 2023, following Bitcoin’s lead, it is lagging behind. Specifically, as Bitcoin, Doge, and Ripple moved more or less in sync, Ethereum bulls lagged behind.

The recent rally has reduced cryptocurrency losses against the US dollar, but not to the same extent. For example, BTC/USD is now -49.86% lower than it was in January 2022. However, ETH/USD has not recovered as much and it is down -57.85% on the same period.

In other words, if US Dollar weakness is believed to continue, it might be appropriate to bet on Ethereum’s rally more than Bitcoin, Doge or Ripple.

On Wednesday, the US Federal Reserve is set to announce its interest rate decision for the first time in 2023. A press conference will follow the announcement and US dollar volatility will reach extreme levels.

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