CryptoQuant Analysts: Ethereum’s 44% Decline Compared to Bitcoin: Insights from CryptoQuant

CryptoQuant Analysts- CryptoQuant Reveals Ethereum’s 44% Underperformance Against Bitcoin Since 2022

CryptoQuant Analysts– Ethereum has significantly underperformed Bitcoin, showing a 44% decline in value since the Ethereum blockchain transitioned to a proof-of-stake (PoS) network nearly two years ago. This major upgrade, known as The Merge, marked a pivotal shift for Ethereum, but recent analysis highlights ongoing challenges for the cryptocurrency.

Current ETH/BTC Dynamics

As of now, Ethereum’s price relative to Bitcoin stands at 0.0425, the lowest level observed since April 2021. Despite the approval of Ethereum spot exchange-traded funds (ETFs) in the U.S. on July 23, Ethereum has continued to lag behind Bitcoin in performance.

Comparative Underperformance

Beyond Bitcoin, Ethereum has also fallen behind other major cryptocurrencies. Since The Merge, Ethereum has underperformed altcoins such as Solana and BNB, with losses of 53% and 18% respectively. This broader trend suggests that Ethereum’s struggles are not limited to Bitcoin alone.

Potential for Further Decline

CryptoQuant analysts predict that Ethereum might decline even further relative to Bitcoin. The analysts suggest that Ethereum needs to drop to approximately 0.02 in BTC terms—representing a 50% decline—to reach undervaluation territory. This projection indicates that Ethereum’s price may face additional downward pressure.

Reasons Behind Ethereum’s Underperformance

Weaker Network Activity

One of the primary reasons for Ethereum’s underperformance appears to be weaker network activity compared to Bitcoin. For instance, Ethereum’s total network transaction fees have been decreasing, a trend linked to lower fees following the recent Dencun upgrade. Additionally, Ethereum’s transaction count relative to Bitcoin has fallen to one of its lowest levels since July 2020.

Supply Dynamics

Unfavorable supply dynamics are also impacting Ethereum’s price. The total supply of ether has been steadily increasing since early April, reaching 120.323 million ETH—the highest level since May 2023. This growing supply may contribute to downward pressure on Ethereum’s price.