Martucci's Zero-tree Entropy (ZTE) coding algorithm exploits the advantages of discrete wavelet coding to improve the video quality of inter-frame coding. In this algorithm the wavelet tree is coded into three different tables, type, valz and valnz. Subsequently these three tables are arithmetic coded. However, the statistical variation of the distribution of the values and types are not considered in this categorization. We propose to decompose the zerotree such that this variation is taken into account. In our representation, values and the types are reorganized into hierarchical structures according to the sub band and the orientation. Our test results show that the proposed algorithm can reduce the bit rate per frame up to 73% over the Martucci's algorithm and performs better than EBCOT at higher bit rates.