Ether’s recent performance in the cryptocurrency market has been lackluster, with its price hovering around a three-year low against Bitcoin. This underperformance has left ETH lagging behind BTC’s robust performance in 2024, as Bitcoin has soared by about 37% this year while Ethereum is only 0.015% above its January 1 level.
The ETH/BTC ratio has decreased by about 24% over the last three months, hitting a three-year low of 0.0387 on September 16. This decline reflects weaker demand for Ether, as investors are showing a preference for Bitcoin over ETH. The drop in the ratio has raised concerns among investors, who may now be looking to shift their focus towards Bitcoin, potentially leading to a decrease in buying demand for Ethereum in the near future.
U.S. spot Bitcoin ETFs have seen greater success since their approval by the Securities and Exchange Commission (SEC) on January 10, compared to spot Ethereum ETFs. According to on-chain data provider Glassnode, these investment products have had a smaller influence on Ether’s price (1% of spot volume) compared to their impact on Bitcoin, which stands at 8%.
In addition to Ether’s bearish performance against Bitcoin, ETH has been further impacted by the steady increase in Bitcoin dominance. Bitcoin’s market dominance continued to rise in 2024, hitting a 40-month high of 58% on August 5. This trend suggests that the leading cryptocurrency is gaining strength against altcoins, including Ether.
Active addresses for Ethereum DApps have also dropped by 20% in the past 30 days, according to DAppRadar data. This decline is concerning, especially as competing blockchains like Solana and Tron experienced significant increases in total UAWs during the same period.
As Bitcoin dominance continues to climb, ETH’s value against its BTC pair is likely to keep declining. This indicates that investors are more bullish on Bitcoin and may be allocating less capital to Ether. The current price of ETH trades at $2,288, declining over 4.7% in the last 24 hours, facing resistance near the 20-day EMA ($2,351).
If the price remains below $2,300, it could signal bearish momentum, potentially pushing the ETH/USDT pair down to $2,100. Buyers may try to support the price at this level, but if it fails, the pair could drop to the psychological support of $2,000. To regain control, buyers need to drive the price above the 20-day EMA, potentially leading to a rally towards the 50-day SMA ($2,555) and the breakdown level of $2,771.