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As Bitcoin (BTC) reached a new all-time high (ATH) of $98,310 today, the ETH/BTC trading pair fell to multi-year lows, raising questions about the relative strength of Ethereum (ETH), the second-largest digital asset. .
What causes Ethereum’s poor performance versus Bitcoin?
Bitcoin’s new ATH earlier today brought it within $2,000 of the coveted $100,000 mark. However, Bitcoin’s continued dominance has resulted in altcoins, especially Ethereum, underperforming over the course of the year.
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The weekly chart below reveals that the ETH/BTC trading pair fell to a multi-year low of 0.0331 – a level last seen in March 2021. Since December 2021, the pair has failed to form a new high, reflecting a decline of over 60 %.
The pair’s losses have accelerated since July 2024, coinciding with the rise in Bitcoin prices, driven by growing optimism about the prospects of pro-cryptocurrency Republican candidate Donald Trump in the US presidential elections.
the success Bitcoin exchange-traded funds (ETFs) have also contributed to institutional preference for BTC over other cryptocurrencies. At present, BTC ETFs have more than $100 billion in total net assets.
While Ethereum ETFs have also received regulatory approval, they have not had the success of their Bitcoin counterparts. For example, US-based Ethereum spot ETFs have amassed just $8.96 billion in total net assets to date.
Additional factors, such as the Bitcoin halving in April 2024 – which reduced miner rewards from 6.25 BTC to 3.125 BTC – further reinforced the narrative of Bitcoin’s scarce supply. In contrast, Ethereum’s high issuance rate has led some experts to question its status as “ultrasonic money.”
Additional factors such as Bitcoin Half In April – which reduced miner rewards from 6,250 BTC to 3,125 BTC – further reinforced the narrative of a scarcity of supply of digital assets. In contrast, Ethereum to rise The rate of issuance has led some experts to question its status as “ultrasonic money.”
When will Ethereum recover its losses related to BTC?
With the ETH/BTC trading pair hitting new lows, Ethereum traders are looking to see when ETH might recover its losses. Many analysts have shared their views on X.
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Cryptocurrency analyst @CryptoGemRnld recently It has been identified Two strong support areas: trend line support and demand box area. According to the analyst, since 2017, the ETH/BTC pair has historically rebounded from these levels, often leading to altcoin seasons.
Likewise, veteran trader Peter Brandt has Suggested The ETH/BTC ratio may be nearing the bottom. Brandt’s analysis predicts a possible reversal in December, with the trading pair starting an upward trajectory.
Recent data supports these expectations Pointing ETH may be undervalued at current prices. The limited flow of Ethereum to exchanges, coupled with the lack of significant profit taking, suggests that Ethereum bulls are holding out for further gains.
Additionally, the ETFs were spot ETH registration Large flows, attracting more than $515 million between November 9 and November 15. At press time, Ethereum is trading at $3,333, up 7.4% over the past 24 hours.
Featured image from Unsplash, charts from Tradingview.com