After rallying to $3,972 after the approval of spot Ethereum exchange-traded funds (ETFs), Ether (ETH) has underperformed over the last week, down 10%, compared to Bitcoin and the broader crypto market, leading traders to doubt whether the altcoin’s downtrend is over.
To put this into context, Bitcoin’s (BTC) price fell by 6% during the same period, while the total cryptocurrency market capitalization dropped by 5.3%.
A number of market and technical indicators show that ETH may witness a deeper correction before making another attempt at recovery.
ETH//USD daily chart. Source: TradingView
The ETH/BTC ratio trended lower over the last week
Ether has been down 10% over the last seven days, underperforming Bitcoin and other top layer 1 tokens. BTC price has dropped 5.5% over the last week, with the ETH/BTC ratio dropping 5.21% from 0.055 on June 3 to 0.0513 on June 11, its lowest since May 20.
ETH/BTC ratio. Source: TradingView
Currently, there are a handful of reasons for ETH’s underperformance, including Bitcoin-specific factors in 2024. U.S. spot Bitcoin ETFs have largely been a success seeing almost $2 billion in capital inflows last week. In addition, the upcoming CPI reading and FOMC meeting decision on rate cuts has preceded a notable market correction over the last few months, affecting all crypto prices including Ether’s.
Moreover, there has been a decline in Ethereum’s network activity (in specific metrics) over the last 90 days. Data from Glassnode reveals that daily active addresses on the Ethereum network Ethereum have dropped from 622,963 addresses on March 20 to 458,400 on June 10. There has been a 1.2% decrease over the last 48 hours alone.
Number of active addresses on Ethereum. Source: Glassnode
Although Ethereum remains the network to beat in the layer 1 sector, Solana has recently captured its market share in this segment regarding on-chain activity. According to data from DappRaddar, Ethereum’s NFT volume has decreased by 9% over the last seven days to 105 million.
The figure below shows that the Ethereum network trails Solana and the BNB Chain in total UAWs. More than 524,000 million UAWs…
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