- Ethereum sees a poor performance against Bitcoin, with the ETH/BTC pair reaching a four-year low.
- ETH has declined by 2.48% over the past 24 hours.
Over the past months, Ethereum [ETH] has struggled to sustain an upward momentum, while Bitcoin [BTC] has continually made new highs.
As such, Ethereum has continued to struggle against Bitcoin as BTC.Dominance pushed the pair to recent lows.
In fact, as of this writing, ETH/BTC was trading at $0.031, hitting a four-year low for the pair. This dip raises concerns about Ethereum’s future prospects and whether it can reverse its fortunes.
Ethereum continues to struggle against Bitcoin
Throughout the past year, Bitcoin has made significant gains, rising by 144.45%. This marked a rise from $40K to $101K at the time of writing, while BTC has reached an ATH of $109K over the same period.
Source: TradingView
In comparison, Ethereum has made moderate gains over the same period, rising by 30.27% to $3219 at press time. Over this period, ETH remained approximately 33% below its ATH of $4891 recorded in 2021.
With the ETH/BTC ratio dropping to 0.031, it has erased all gains realized over the past four years. Historically, the pair peaked at 0.087 in 2021, when the market saw a strong upsurge in altcoins.
However, since reaching this level, the altcoin has experienced strong downward pressure.
Factors behind this decline
Various factors have resulted in Ethereum’s underperformance against Bitcoin. Notably, the king coin has experienced high preference from institutions and governments.
In this regard, many governments have considered establishing Bitcoin reserves, causing BTC to see higher preference and adoption rates compared to other crypto assets.
Source: X
Ethereum, on the other hand, has experienced an adoption rate decline, with new addresses dipping by 9.32%.
Source: Santiment
This drop in addresses is further evidenced by a rising NVT ratio, which has spiked to 185.5, signaling reduced transaction activity. As such, transactions on the Ethereum network have continually reduced.
This drop in network activity raises overvaluation concerns, thus extending ETH’s poor performance.
What lies ahead?
With reduced market preference, ETH could see more losses, and its poor performance against Bitcoin could continue.
Source: Santiment
This potential drop is supported by the fact that the MVRV ratio has dropped to 0.64. Such a drop implies that investors are bearish and have low confidence in short-term price recovery.
Realistic or not, here’s ETH’s market cap in BTC’s terms
Therefore, in the short term, Ethereum is facing strong bearish sentiment which could see ETH drop to $3160. However, if buyers take this drop as a buying opportunity, ETH will reclaim $3300 and attempt $4k.
This will strengthen the ETH/BTC pair and push it to reclaim $0.04.
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