Ethereum (ETH) price continues to underperform Bitcoin’s 2024 gains, but Glassnode analysts suggest there could be brighter days ahead.
“Weak capital turnover” is behind Ether’s price underperformance.
Data from Cointelegraph Markets Pro and TradingView shows that Ethereum has underperformed Bitcoin over the past two years, causing the ETH/BTC ratio to weaken, reaching $0.04622 on May 1, its lowest since April 2021.
Glassnode said Ethereum’s underperformance this cycle compared to Bitcoin was due to a “measurable lag in speculative interest” in the STH cohort.
The report defines the short-term holder group as “investors who have acquired coins within the past 155 days and are often seen as a proxy for new investor demand.”
Glassnode analysts described a “notable increase in speculative activity” in terms of capital accumulation among STHs ahead of BTC’s all-time high in March. This is not reflected in ETH, which has yet to break previous highs.
According to the company’s on-chain data, Bitcoin’s STH realization limit is roughly at the same level as its last bullish peak, while ETH’s STH realization limit is still less than half of previous cycle levels, suggesting a significant lack of new capital inflows. . .
“In many ways, this lack of new capital inflows reflects the underperformance of ETH compared to BTC.”
Related: Bitcoin exchange inflows fall to a 10-year low after hitting an all-time high of $74,000
Markets are in the “early stages of a macro uptrend”
Historically, Ether’s price performance has been closely tied to Bitcoin price movements, and recent price movements reflect this relationship.
Bitcoin has been selling since the fourth halving, falling 11% to a two-month low of $56,500 on May 1. Bitcoin price has since recovered and consolidated within the $62,700 and $65,550 price range over the past two days.
According to Glassnode, Ether experienced a similar correction with a 6% drop following the halving, marking its worst halving performance ever.
However, Glass pointed out that the Bitcoin price has fallen 20.3% from its all-time high of $73,835. This is the largest correction by close since the FTX low in November 2022.
“That said, this macro uptrend still appears to be one of the most resilient uptrends in history, with a relatively shallow correction so far.”
Using the Net Unrealized Profit/Loss (NUPL) indicator, the on-chain data analytics firm found that the realization limits associated with long-term holders (LTH) of both Ether and BTC are still relatively low. “Macro rising trend phase”
In a previous report, Glassnode observed that capital inflows into ETH tend to lag those into BTC. For example, during the 2021 cycle, the largest inflow of new capital into BTC occurred 20 days before the largest inflow into ETH.
While monitoring the capital rotation between these two assets using the 30-day change in Realized Cap, Glassnode analysts found that ETH STH Realized Cap is yet to gain momentum in the current cycle.
“For both assets, short-holder variation peaked before the 2021 cycle peak. This year, BTC short holders Realized Cap hit new all-time highs, while the ETH indicator barely rose.”
Glassnode found that market activity following the halving has been very similar to previous cycles, but several data points show that Ether is underperforming BTC.
“Analyzing capital flows and circulation between BTC and ETH, we see that Bitcoin has received the lion’s share of inflows, driven in part by US spot ETFs. Short-term holders and speculative activity appear to be concentrated within Bitcoin, and so far the spread to Ethereum has been noticeably weaker.”
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