Ether (ETH) had been rallying since the beginning of the new year but began tapering off in mid-March. The altcoin has trailed Bitcoin (BTC) since Jan. 1, gaining roughly 48% compared to BTC’s 57% in their respective USD pairs year-to-date.
Bitcoin, Ether YTD performance. Source: TradingView
There are three main reasons why ETH has been underperforming BTC throughout the past several days, including a decrease in network activity and declining sentiment surrounding the approval of spot Ethereum ETFs in May.
ETH trended lower against BTC in the last 30 days
Ether is down 13.5% over the last 30 days, underperforming Bitcoin and other top layer 1 tokens. BTC’s price has dropped only 4% over the last 30 days, while other top-cap layer 1 tokens, such as BNB Chain’s BNB and Solana’s SOL, have rallied 15.5% and 16%, respectively, over the same timeframe.
The ETH/BTC ratio began declining on March 8, reaching its year-to-date low of $0.047 on April 7.
Bitcoin, Ether YTD performance. Source: TradingView/
There are several reasons why Ether has underperformed Bitcoin over the last month, including new all-time high prices, over $10 billion in investments into the spot BTC ETF, and Bitcoin Ordinals trading volume surging close to $3 billion. The upcoming Bitcoin supply halving, which has historically preceded a crypto market bull run, has also added to BTC’s tailwinds.
Decreasing on-chain activity underpins Ether’s underperformance
Investigating Ethereum’s network activity, including its scaling solutions, can also give insight on why Ether continues to underperform BTC. Decentralized applications (DApps) are at the core of this layer 1 blockchain, and diminishing use in terms of users and volumes indicates less demand for ETH.
Data from Web3 data aggregator DappRadar shows that the top Ethereum decentralized applications (DApps) have seen an average 6.42% decrease in the number of active addresses over the last 30 days.
Blockchains ranked by 30-day DApp volumes. Source: DappRadar
Over the past 30 days, Ethereum DApps experienced a 26.51% drop in transaction volume fueled by decreases in Uniswap, MetaMask Swap, Blur…
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