Ether’s (ETH) price is trading around a 40-month low against Bitcoin as it continues to trail BTC’s price performance in 2024.
ETH trades just 0.02% above its Jan. 1 opening, while Bitcoin (BTC) has surged approximately 36% in 2024.
Ether, Bitcoin year-to-date performance. Source: TradingView
Let’s dig into some of the reasons for Ether’s continued underperformance.
ETH trended lower against BTC in the last 90 days
Ether is down 34% over the last 90 days, underperforming Bitcoin whose price has dropped by only 15% over the same period.
The ETH/BTC ratio is also down approximately 22% over the last three months, reaching a multi-year low of 0.04057 on Sept. 11.
ETH/BTC ratio. Source: TradingView
The decline in the ETH/BTC ratio indicates a lack of demand for Ether, with investors preferring Bitcoin over ETH.
To put this in context, US spot Bitcoin ETFs have largely been more successful since their approval by the Securities and Exchange Commission (SEC) on Jan. 10 than the spot Ethereum ETFs.
Onchain data provider Glassnode reported that the relative influence of these investment products on Ether’s price is lower (1% of the spot volume) than the impact on Bitcoin price (8%).
“This suggests that the appetite for the Bitcoin ETF remains an order of magnitude larger than its Ethereum counterpart.”Comparison of ETF impact on ETH and BTC markets. Source: Glassnode
Bitcoin’s market dominance continues to rise
In addition to Ether’s uninspiring performance in its BTC pair, ETH has been negatively impacted by the steady rise in Bitcoin dominance.
As reported by Cointelegraph, Bitcoin’s market dominance continued its upward trajectory in 2024, reaching a 40-month high of 58% on Aug. 5. This indicates that the top cryptocurrency is strengthening against altcoins, including Ether.
Bitcoin market dominance chart. Source: TradingView
Bitcoin dominance measures BTC’s market capitalization relative to the overall crypto market and highlights the assets’ strength. It is often used by investors to gauge market sentiment.
With Bitcoin dominance on a steady rise, ETH’s value against its BTC pair is expected to continue dropping, suggesting that investors feel more bullish about BTC and possibly allocating less money to Ether investments.
Related: VanEck, StoneX analysts peg Ether price upside at $12K to $22K
Ethereum onchain metrics are sluggish
Measuring the number of active addresses on the network provides a quick and reliable indicator of the effective use of the blockchain and demand for the underlying token.
The current 30-day average of 430,250 daily active addresses on the Ethereum network is a 7.7% decrease from 90 days ago and nowhere near the 686,350 seen in May 2021. Thus, onchain data shows that users are interacting less with the layer-1 blockchain, suggesting a reduction in Ether token transactions.
30-day average of daily active addresses on Ethereum. Source: Gassnode
Gauging the number of unique active wallets (UAWs) on the Ethereum blockchain gives a broader view of the DApp usage on the network.
According to DAppRadar data, Ethereum DApps’ active addresses have declined by 19% over the past 30 days. Overall, the data is disheartening, considering competing blockchains such as Solana and Tron saw a 257% and 343% increase in total UAWs over the same period.
Ethereum network 30-day DApps activity. Source: DappRadar
There is a need for sustained network growth, an increase in Ether transactions, and DApp usage for ETH to rise above the $2,400.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.