Ethereum’s Dominance Under Threat as ETH/BTC Ratio Falls Below 0.022
Ethereum, the second-largest cryptocurrency, is experiencing a notable downturn. The ETH/BTC ratio, which measures Ethereum’s strength against Bitcoin, has plummeted to 0.022, its lowest as December 20. This decline reflects Ethereum’s weakening position in the crypto market.
As September 2022, Ethereum has lost over 73% of its value relative to bitcoin. Currently, ETH trades at around $1,880, down 9% in the past week and 62% from its all-time high. In contrast, Bitcoin has only dropped 10% year-to-date.This disparity highlights Ethereum’s struggle to maintain its dominance in the smart contract and layer 1 ecosystem.
Several factors contribute to this shift. Ethereum’s total value locked (TVL) has fallen from 61.64% to 52.5% of the total market. Competitors like Solana,Binance Chain,and Avalanche are gaining ground. solana’s TVL has more than doubled in a year,capturing a larger share of the market. Ethereum’s high gas fees, though improved, still make it less attractive for smaller transactions compared to newer chains.
- Ethereum’s TVL has decreased from 61.64% to 52.5%.
- Solana’s TVL has grown from 2.84% to 7.24%.
- Ethereum ETFs have seen a 9.8% drop in net flows in March 2025.
Short positioning in Ethereum has surged 500% since November 2024, indicating growing bearish sentiment. However, retail investors continue to buy despite this trend. The decline in the ETH/BTC ratio and market share suggests capital is moving away from Ethereum. As Bitcoin reasserts its dominance, Ethereum’s future in the L1 blockchain race remains uncertain.
Despite these challenges, Ethereum still attracts users for passive DeFi activities. Yet, its existing use cases may not align with current retail user trends. The decline in Ethereum’s market dominance, now below 8.4%, further underscores the shift. While Bitcoin ETFs attract significant inflows, Ethereum ETFs struggle. The future of Ethereum’s dominance hinges on adapting to evolving user behavior and addressing its limitations.
For more insights, check The Kobeissi Letter for detailed analysis.
ethereum’s dominance in the crypto market has hit a four-year low. Its market share is now below 8.4%. This shift indicates that investors are moving towards other options like Bitcoin, Solana, and new layer 1 platforms.
Scalability challenges are partly to blame. Ethereum’s mainnet can only handle 10 to 62 transactions per second. This is far less than Solana’s 4,322 TPS.The merge in 2022 improved energy efficiency but didn’t boost transaction speed.As a result, users and developers are exploring alternatives.
Layer-2 solutions like arbitrum and Optimism are gaining popularity. these networks process transactions off-chain, then settle them on Ethereum. while this reduces costs, it also means less activity on the main network. Analysts say this is why Ethereum’s mainnet is becoming less active. Layer-2 networks are attracting more users and fees. For instance, Ethereum’s mainnet is seeing less traffic. Layer-2s, such as Arbitrum and Optimism, are becoming more attractive. They offer faster speeds and lower fees.However, this has a downside. More transactions are moving off the mainnet.This trend is evident in the data.Layer-2s are capturing more fees. They are also drawing users away from the base layer. This shift affects Ethereum’s fee-burning mechanism. Fewer on-chain transactions mean fewer ETH burns. This reduces the deflationary pressure on ETH. The network’s fee-burning feature, introduced in 2021, aimed to make ETH more valuable. But with less on-chain activity, ETH’s deflationary effects are weakening. Analyst Geoff Kendrick notes that layer-2s, especially Coinbase’s Base, are siphoning billions in value from the mainnet. Base alone has diverted about $50 billion in value.This reduces ETH’s value proposition. ETH was once seen as “ultrasound money.” Now,ETH is becoming inflationary again. The annual inflation rate is now at 0.5%. Staking rewards have also
Ethereum Faces Challenges amid Market Uncertainty
Ethereum, once a hub for on-chain innovation, is now facing tough times. Some users even joke that the ETH mainnet is turning into a “graveyard.” Despite this, the crypto’s future remains uncertain.
Market analysts are divided on Ethereum’s price direction. Bloomberg’s Mike McGlone believes ETH’s performance mirrors broader risk assets. If U.S. stocks drop, ETH could revisit the $1,000 mark. A recovery to $2,000 might signal a positive shift for risk assets. However, the risks seem to outweigh the opportunities for now.
McGlone warns that ETH’s fate is closely tied to the stock market. If stocks fall, ETH might follow suit. A drop to $1,000 is possible if the economy worsens. On the flip side,a rise to $2,000 could indicate a broader market rebound. This correlation with stocks means ETH’s price could swing based on macroeconomic trends.McGlone suggests that ETH’s price could plummet if stocks continue their downward trend. A weaker dollar could help, but the outlook isn’t promising. The U.S. economy’s health will heavily influence ETH’s path. High interest rates and inflation could push ETH lower. The crypto’s price is struggling, with repeated failures to break $2,150.
Analyst Mags paints a grim picture, calling ETH’s chart “one of the worst.” ETH has failed to break $4,000 thrice. The latest dip below the mid-range level signals further downside risks. A retest near $1,060 is possible, matching 2022’s bear market lows.
However, Michaël van de Poppe sees a glimmer of hope. ETH might be showing early signs of a “deviation.” Breaking $2,100-2,150 could lead to a swift rise to $2,800. A weaker U.S. Dollar Index could also boost crypto in Q2.
For now, ETH’s fate hinges on macroeconomic factors and Bitcoin’s performance. A decisive move above $2,150 could signal a recovery. Otherwise, technical and structural pressures will likely continue.
Major Crypto Exchange Launches New Trading Features
A leading cryptocurrency exchange has unveiled exciting new trading features to enhance user experience. This move aims to attract more traders and improve the platform’s functionality.
The exchange has introduced advanced order types,making it easier for users to execute trades. These include stop-loss and limit orders, which help manage risk and maximize profits.traders can now set specific conditions for their trades, ensuring they only execute when desired.
Another key addition is the integration of a user-friendly mobile app. This app allows traders to manage their portfolios on the go. They can check prices, place orders, and monitor their investments anytime, anywhere.
The exchange also emphasizes security. It has implemented robust measures to protect user funds and data. This includes two-factor authentication and encrypted storage for sensitive data.
These updates come at a time when the crypto market is experiencing significant growth. The exchange hopes to capitalize on this trend by offering top-notch services. For more details,visit the official website.
these new features are expected to boost the exchange’s popularity. they provide traders with the tools they need to succeed in the competitive crypto world.
