Key Points
- Ethereum struggles against Bitcoin, with ETH/BTC reaching a four-year low.
- Factors such as reduced adoption rate and overvaluation concerns contribute to Ethereum’s poor performance.
Ethereum’s performance against Bitcoin has been subpar, with the ETH/BTC pair hitting a four-year low. Over the past day, Ethereum’s value has seen a 2.48% decrease.
Ethereum’s Struggle Against Bitcoin
Bitcoin has consistently set new records over the past few months, while Ethereum has had difficulty maintaining an upward trajectory. This has resulted in Ethereum’s continued struggle against Bitcoin, with the ETH/BTC pair reaching a low of $0.031 at the time of writing, a four-year low for the pair.
Over the past year, Bitcoin has seen a significant 144.45% increase, rising from $40K to $101K, while reaching an all-time high of $109K. In contrast, Ethereum’s gains have been more modest, with a 30.27% rise to $3219, remaining about 33% below its all-time high of $4891 recorded in 2021.
Reasons for Ethereum’s Decline
Several factors contribute to Ethereum’s underperformance against Bitcoin. One notable factor is the higher preference for Bitcoin among institutions and governments, with many considering establishing Bitcoin reserves. This has led to higher adoption rates for Bitcoin compared to other cryptocurrencies.
Ethereum, however, has seen a decline in adoption rate, with new addresses dipping by 9.32%. This decrease is further highlighted by a rising NVT ratio, indicating reduced transaction activity on the Ethereum network.
What’s Next for Ethereum?
Due to decreased market preference, Ethereum may face further losses, and its poor performance against Bitcoin may continue. This potential drop is supported by the decrease in the MVRV ratio to 0.64, suggesting that investors are bearish and lack confidence in short-term price recovery.
In the short term, Ethereum faces strong bearish sentiment, which could see its value drop to $3160. However, if buyers see this drop as a buying opportunity, Ethereum could reclaim $3300 and potentially try for $4k. This would strengthen the ETH/BTC pair, pushing it to reclaim $0.04.