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The cryptocurrency market has just flashed a short-term bear signal, according to VanEck Head of Digital Assets Research Matthew Sigel.

Sigel said Tuesday on X that Bitcoin and Ethereum had formed a “rare divergence” as ETH did not mirror BTC’s over 10% drawdown on the day. He said it was the first time the divergence had occurred since 2021, adding that since 2020, the setup had occurred on just 52 out of 1,927 days.

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Sigel said that, on average, Bitcoin has experienced a 2.8% decline the week after the divergence and a 15.6% decline the month after. On the other hand, Ethereum has, on average, experienced a 6.4% increase one week after and an 8.4% decline one month after, he said.

“A bearish flag for crypto overall: ETH cushions short-term, but both tend to roll over,” he said.

When one user suggested that the recent divergence could be an outlier and that Bitcoin and Ethereum could both rise, Sigel said it was “possible,” but maintained that “history tilts bearish.”

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The divergence between Bitcoin and Ethereum comes as the cryptocurrency market has faced significant volatility over the past week, with BTC oscillating between $117,000 and $110,000. MEXC Ventures Investment Director Leo Zhao attributed the recent price swings to thinning liquidity, exchange-traded fund rebalancing and heavy profit-taking from OG Bitcoin holders in a Tuesday note shared with Benzinga.

“In the absence of a fresh macro catalyst, such as a dovish FED policy pivot, rate cuts, or renewed ETF inflows, BTC is likely to drift into a period of market consolidation as the market digests the recent distribution,” he said. “The long-term picture, however, remains underpinned by institutional accumulation, which continues to outpace new supply, suggesting that once the risk-averse approach wears off and macro uncertainty headwinds subside, Bitcoin retains the structural foundation for another attempt at record highs of $130,000 before the EOY.”

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But while Zhao remains optimistic in the long term, veteran commodities trader Peter Brandt warned Wednesday on X that Bitcoin could be forming a cycle top. Brandt cited the sale of 24,000 BTC by a single whale, which rocked the market over the weekend, as a sign of distribution.