Ether (ETH) price is trading at its lowest price in 40 months versus Bitcoin and is still lagging BTC price performance in 2024.
ETH is up 0.02% from its opening price on January 1, while Bitcoin (BTC) has surged by about 36% in 2024.
Ether, Bitcoin Year-to-Date Performance. Source: TradingView
Let’s look at some of the reasons for Ethereum’s continued underperformance.
ETH has been in a downtrend against BTC over the last 90 days.
Ether has fallen 34% over the past 90 days, which is lower than Bitcoin, which has fallen 15% over the same period.
The ETH/BTC rate has also fallen by around 22% over the past three months, hitting a multi-year low of 0.04057 on September 11.
ETH/BTC ratio. Source: TradingView
A decline in the ETH/BTC rate indicates a lack of demand for Ether, with investors preferring Bitcoin over ETH.
To put that into context, since the SEC approved spot Bitcoin ETFs on January 10, spot ETFs have been more successful overall than spot Ethereum ETFs.
According to on-chain data provider Glassnode, the relative influence of these investment products on the Ethereum price is 1% of spot trading volume, which is lower than their influence on the Bitcoin price (8%).
“This suggests that there is much greater demand for Bitcoin ETFs than for Ethereum ETFs.” Comparing the impact of ETFs on the ETH and BTC markets. Source: Glassnode
Bitcoin’s market dominance continues to rise
In addition to Ether’s poor performance against BTC, ETH has been negatively impacted by Bitcoin’s steadily increasing dominance.
According to Cointelegraph, Bitcoin’s market dominance continued its upward trajectory in 2024, reaching a 40-month high of 58% on August 5. This shows the top cryptocurrency gaining strength against altcoins, including Ether.
Bitcoin market dominance chart. Source: TradingView
Bitcoin dominance measures BTC’s market cap relative to the overall cryptocurrency market and highlights the strength of the asset. It is often used by investors to gauge market sentiment.
As Bitcoin’s dominance continues to rise, the value of ETH relative to BTC is expected to continue to decline, suggesting that investors are likely to become more bullish on BTC and reduce their investment in Ether.
relevant: VanEck, StoneX Analysts Predict Ether Price Rise to $12K-$22K
Ethereum on-chain metrics are slow
Measuring the number of active addresses on a network can provide a quick and reliable way to gauge the effective use of the blockchain and demand for its underlying tokens.
The current 30-day average daily active addresses on the Ethereum network is 430,250, down 7.7% from 90 days ago and well below the 686,350 confirmed in May 2021. Therefore, on-chain data suggests that users are interacting less with the Layer 1 blockchain, which in turn has led to a decline in Ether token transactions.
30-day average of daily active addresses on Ethereum. Source: Gassnode
Measuring the number of unique active wallets (UAWs) on the Ethereum blockchain provides a broader view of DApp usage on the network.
According to DAppRadar data, active addresses for Ethereum DApps have decreased by 19% over the past 30 days. Overall, this data is disappointing considering that competing blockchains like Solana and Tron have seen increases of 257% and 343% in total UAW, respectively, over the same period.
Ethereum Network 30-Day DApp Activity. Source: DappRadar
For ETH to surpass $2,400, sustained network growth, increased Ether transaction volume, and DApp usage are needed.
This article is for general information purposes only and is not intended to be, and should not be taken as, legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.