Ether's Underperformance Raises Concerns, but Market Trends Positive

While Ethereum’s (ETH) price struggles to match Bitcoin’s 2024 gains, analysts suggest that the cryptocurrency market remains on an upward trajectory.

Ethereum continues to underperform Bitcoin. Despite Bitcoin’s gains, Ethereum lags, leading to a weaker ETH/BTC ratio. According to Glassnode, the ratio reached its lowest point since April 2021, hitting $0.04622 on May 1.

Glassnode explains that Ethereum’s underperformance is due to a lag in speculative interest among short-term holders (STH). This cohort comprises investors who acquired their coins within the last 155 days and reflects new investor demand.

While Bitcoin experienced a surge in speculative activity leading up to its all-time high in March, Ethereum has yet to match this trend, as it has not reached its previous all-time high.

The lack of new capital inflows reflects Ethereum’s underperformance relative to Bitcoin. Glassnode’s on-chain data reveals that while Bitcoin’s STH-Realised Cap is almost at the same level as the last bull run peak, Ethereum’s STH-Realised Cap is less than half of the previous cycle levels, indicating a lack of new capital inflow.

The market is still in the early stages of an uptrend. While Ethereum’s performance has historically been closely linked to Bitcoin’s, the recent price action suggests this trend continues.

Both Bitcoin and Ethereum experienced a sell-off after the fourth halving. However, Bitcoin has steadily recovered, consolidating within a specific price range.

As measured from its all-time high, Bitcoin has experienced a deeper correction than Ethereum.

Despite recent challenges, Bitcoin and Ethereum still have a relatively low Realised Cap associated with Long-Term Holders (LTHs), suggesting that the market is still in the early stages of an uptrend.

Capital inflows into Ethereum typically lag behind those into Bitcoin. While Bitcoin has received the majority of inflows, Ethereum has seen weaker speculative activity.

These factors suggest that Ethereum has underperformed relative to Bitcoin, raising investor concerns.