Ethereum’s Price Comparison with Bitcoin
In October, the price of ETH (Ethereum) has experienced a greater decline compared to BTC (Bitcoin). While Bitcoin has remained relatively stable, Ethereum’s price has been on a downward trend.
At the start of the month, ETH was valued at around $1,675, showing an increase from the end of September. However, it gradually declined to $1,500 as of yesterday. Overall, ETH has lost 7.5% since the beginning of the month and nearly 12% from its October highs.
It is important to consider the past months to gain a better understanding of the situation. Although ETH has gained 34% since the start of the year, most of this growth occurred in early January. The current value is similar to that of January 14, which marked the end of its initial rise.
In March and April, ETH experienced a significant increase due to the anticipation of the Shapella update. However, this surge was short-lived, and by mid-June, it had returned to a level comparable to that of January 20.
During mid-August, there was an unexpected descent below $1,700 for ETH. Although it briefly fell to $1,530 on September 11, it recently reached its lowest point for the second half of 2023. Currently, ETH is down by 68% from its 2021 highs.
The Price Comparison between Bitcoin and Ethereum
In 2023, BTC followed a similar parabolic price pattern compared to ETH until October when they began to differ significantly. At the beginning of October, BTC was valued at around $27,000 with only a slight decrease since then.
Unlike ETH’s decline in October, BTC has remained relatively stable since mid-March, hovering around $27,000. In terms of year-to-date gains, BTC has increased by 67% compared to ETH’s 34%, and when comparing to the 2021 highs, BTC is down by 61% while ETH is down by 16%.
Since April 21, when BTC was at around $27,000 and ETH was above $1,800, BTC has experienced minimal losses while ETH is down by 16%. This highlights a significant difference between the two cryptocurrencies.
The Bitcoin/Ethereum Ratio
An interesting aspect to analyze is the ratio of Bitcoin’s market capitalization to that of Ethereum over time. Currently, this ratio stands at approximately 2.81 times, with a peak of 2.86 recorded just three days ago.
At the beginning of the year, this ratio was only 2.17 times and reached its lowest point on January 11 at 2.02. Since then, the ratio has been gradually increasing. Even during ETH’s mini bull run in April due to the Shapella update, the ratio continued to rise and exceeded 2.5.
Throughout 2023, Bitcoin’s dominance over Ethereum remained unchallenged. Similar values were observed in the first half of July last year and during the all-time highs in November 2021.
The Causes of Ethereum’s Decline
The apparent decline of Ethereum is not abnormal and has been observed before during the crypto winter of 2018/2019. During that time, ETH experienced larger losses than Bitcoin but also had greater gains during the subsequent bull run.
This difference in performance can be attributed to how each cryptocurrency reacts to bear and bull markets. Currently, it seems that Bitcoin’s price is more resilient compared to Ethereum.
In October, the Dollar Index remained high, indicating a flight from risk-on assets. This affected Ethereum more than Bitcoin. Additionally, when comparing the trend with the gold price, it is evident that Bitcoin has shown greater resilience while Ethereum has suffered a 7.5% loss.
This anomaly can be attributed to the perception that Bitcoin is considered less risky than Ethereum, which makes ETH more vulnerable during uncertain times.
Hot Take: The Different Paths of Bitcoin and Ethereum
The month of October has highlighted the diverging paths of Bitcoin and Ethereum. While Bitcoin has maintained stability and resilience, Ethereum has experienced a decline in its price. This pattern is not entirely surprising considering their historical performance during bear and bull markets.
Bitcoin’s dominance over Ethereum has been evident in recent months, with BTC outperforming ETH in terms of gains and maintaining a more stable price level. The ratio of Bitcoin’s market capitalization to that of Ethereum has also been steadily increasing since January.
The apparent decline in Ethereum’s price can be attributed to various factors, including the flight from risk-on assets and the perception that Bitcoin is less risky. However, it is important to note that this is not a true decline but a different reaction to market conditions.
As the crypto market continues to evolve, it will be interesting to see how these two major cryptocurrencies perform in the coming months and whether their paths will continue to diverge or converge once again.
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