Ethereum Losing Ground to Bitcoin, On-Chain Data Suggests
The price of Ethereum (ETH) has been consistently falling behind Bitcoin (BTC) throughout the year, and on-chain data indicates that this trend will continue.
Bitcoin’s market cap dominance currently stands at 53.3% compared to Ethereum’s 16.7%. The ETH/BTC price ratio recently dropped to its lowest value since April 2021.
Bitcoin Dominance Growing in Derivatives Markets
According to Glassnode analyst James Check, various indicators of market dominance between Bitcoin and Ethereum suggest that Ethereum’s declining relative interest will persist. In both futures and options derivatives markets, Bitcoin dominance is increasing, surpassing 60% and reaching 70%.
Volume and Open Interest Favors Bitcoin
The volume in perpetual futures contracts for both assets was equal a year ago but has since diverged, with Bitcoin now having a 70/30 split advantage. This trend is also observed in options volume and open interest.
ETH Overvalued Compared to BTC
Check notes that Ethereum still appears overvalued compared to Bitcoin based on realized cap. To change this, long-term ETH holders would need to sell their coins at a loss while Bitcoin capital inflows surpass those of Ethereum.
Bitcoin Dominates Spot Trading Volume
In terms of spot trading volume, Bitcoin dominates with a 75% share of exchange flows between the two assets. Bitcoin trading activity often leads, even before new market all-time highs are reached.
Hot Take: Ethereum Struggles as Bitcoin Remains King
The year has not been favorable for Ethereum compared to its older sibling Bitcoin. While Bitcoin has seen significant gains, Ethereum has struggled to keep up. Even alternative cryptocurrencies like Solana and Cardano have outperformed Ethereum in recent months. On-chain data and market indicators suggest that Ethereum’s losing streak will continue, with Bitcoin maintaining its dominance. The founder of Ethereum, Vitalik Buterin, even moved a substantial amount of his ETH holdings to an exchange, further highlighting the challenges faced by the second-largest cryptocurrency. As we approach the end of the year, it is clear that Bitcoin remains the king of the crypto market.
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