Ethereum underperforms as ETH/BTC ratio drops to 5-year low, while Bitcoin continues to dominate the market - IcoHolder.

Ethereum is facing increasing pressure, with its market performance continuing to lag behind Bitcoin. The ETH/BTC ratio has fallen to its lowest point in five years, currently sitting at 0.01787, a level not seen since January 2020. This sharp decline, including a nearly 5% drop in the last 24 hours, highlights Ethereum's ongoing underperformance compared to Bitcoin, which has remained the dominant force in the market.

Over the past year, Bitcoin has gained approximately 34%, while Ethereum has seen a staggering 50% loss in value. The divergence in performance is drawing the attention of investors, who appear to be increasingly favoring Bitcoin as a store of value over Ethereum, whose appeal is waning. This shift is also reflected in Ethereum’s key metrics, which have been on a downward trajectory. Network fees have fallen to multi-year lows, decentralized finance (DeFi) activity has slowed, and other blockchain ecosystems like Solana and BNB Chain are drawing liquidity away from Ethereum.

Despite recent efforts such as the Dencun upgrade aimed at improving Ethereum's scalability and functionality, the platform is struggling to maintain investor interest. A significant shift in user behavior is evident, with many opting for layer-2 solutions like Arbitrum and Base, which are built on Ethereum but promise faster and cheaper transactions. These layer-2s have had the unintended consequence of reducing activity on the Ethereum mainnet, further impacting ETH’s price action.

From a technical perspective, ETH is currently trading at $1,587, with the relative strength index (RSI) hovering just above 40, indicating a neutral market sentiment. For Ethereum to regain momentum, it will need to reclaim the 20-day moving average near $1,618 and push through resistance at $1,650. However, without fresh catalysts and amid ongoing regulatory uncertainty, Ethereum’s short-term outlook remains uncertain.