The ETH/BTC ratio has stayed consistently below 0.05 for more than twelve months, highlighting Ethereum’s inability to gain ground against Bitcoin even during periods many analysts characterized as favorable for ETH.
This persistent underperformance occurs despite Ethereum achieving new all-time highs and attracting billions in exchange-traded fund investments.
Bitget Chief Analyst Ryan Lee attributes this dynamic to Bitcoin’s established role as the cryptocurrency market’s anchor asset. The ratio currently trades at 0.038, down from a peak of 0.043 reached on August 24 when Ethereum hit its record price level. Even this peak failed to breach the critical 0.05 threshold last seen in August 2024.
Despite over $4 billion flowing into Ethereum ETFs during August, the ratio’s continued weakness underscores Bitcoin’s greater appeal among risk-averse institutional investors.
Lee explained that Ethereum’s relative underperformance occurs within an uncertain macroeconomic environment where investors prioritize Bitcoin’s perceived stability.
The analyst outlined specific conditions required for Ethereum to narrow the valuation gap against Bitcoin. These catalysts include quarterly ETF inflows exceeding $9 billion, successful implementation of planned network upgrades, and substantial growth in tokenized assets alongside decentralized finance activity volumes.
Lee projected that favorable macroeconomic conditions, particularly the anticipated 25 basis point Federal Reserve rate cut, could create supportive environments for both cryptocurrencies. Under such scenarios, Bitcoin might advance toward the $150,000-$200,000 range by year-end, while Ethereum could reach $5,800-$8,000 levels.
Technical analysis presents conflicting signals about future ratio direction. One analyst noted that after a 150% surge, the ETH/BTC ratio has entered sideways trading, suggesting the rally remains intact but anticipating Bitcoin leadership before Ethereum’s next upward leg beginning around late October or early November.
However, bearish interpretations also exist. Analyst Colin Talks Crypto identified a forming head-and-shoulders pattern typically associated with trend reversals. If confirmed, this formation could signal weakening momentum and suggest Ethereum may lose additional ground against Bitcoin in coming months.
Also read: Fed expected to cut rates by 25 bps, Bitcoin and Ethereum steady
