Ethereum is quickly losing ground to Bitcoin, with the ETH/BTC ratio falling to its lowest level in five years.
According to CoinGecko data, the ETH/BTC ratio now stands at 0.01787, a level not seen since January 2020. The sharp decline reflects Ethereum’s (ETH) ongoing underperformance relative to Bitcoin (BTC). Over the last 24 hours, the ratio dropped nearly 5%. It’s down 24% in the past month and has fallen 67% over the last year.
This divergence has caught the attention of investors. In the last year, Bitcoin has risen by about 34%, while Ethereum has lost 50% of its value. The market appears to be favoring Bitcoin’s position as a store of value, while Ethereum is having difficulty retaining investor interest.
Despite recent advancements such as the Dencun upgrade, Ethereum’s key metrics have been falling. Network fees have dropped to multi-year lows, decentralized finance activity has declined, and faster chains like Solana (SOL) and BNB Chain (BNB) are attracting new liquidity at Ethereum’s expense.
There have been some disadvantages to Ethereum’s rollup-based scaling approach as well. The Ethereum mainnet has experienced decreased activity and fee income as more users switch to layer-2s like Base and Arbitrum (ARB). Although layer-2s promotes scalability, they have had a short-term negative effect on ETH’s price action. The absence of fresh catalysts and regulatory uncertainty have also affected sentiment.
From a technical perspective, ETH is trading at $1,587 as of press time. The relative strength index is hovering just over 40, leaning more towards the neutral territory. If bulls can reclaim the 20-day moving average near $1,618 and break past $1,650, short-term momentum may shift bullish.
A decisive move above $1,700 would open the door to a rally toward $1,850. On the downside, failure to stay above the $1,550 support may lead to a drop toward $1,440. Ethereum still plays a major role in the crypto ecosystem, but its ongoing weakness against Bitcoin raises doubts about how soon ETH bulls can regain momentum.
