Ethereum’s (ETH) price has been lagging behind Bitcoin’s 2024 gains, but analysts from Glassnode believe that better days may be on the horizon.
According to data from Cointelegraph Markets Pro and TradingView, Ethereum has been underperforming Bitcoin over the past two years, resulting in a weaker ETH/BTC ratio. On May 1, the ratio reached a low of $0.04622, the lowest it has been since April 2021.
Glassnode attributes Ethereum’s underperformance to a “weaker capital rotation” and a lag in speculative interest from the Short-Term Holder (STH) cohort. The STH cohort consists of investors who acquired their coins within the last 155 days and are seen as a proxy for new investor demand.
Glassnode analysts explain that Bitcoin experienced a noticeable increase in speculative activity leading up to its all-time highs in March, but this has not been reflected in Ethereum, which has yet to surpass its previous all-time high. On-chain data from Glassnode shows that Bitcoin’s STH-Realized Cap is nearly at the same level as the last bull run peak, while Ethereum’s STH-Realized Cap is still less than half of the previous cycle levels, indicating a lackluster influx of new capital.
Historically, Ethereum’s price performance has been closely tied to Bitcoin’s price movements, and the recent price action reflects this relationship. After the fourth halving, Bitcoin experienced a sell-off and dropped 11% to a two-month low of $56,500 on May 1. However, Bitcoin’s price has since recovered and has been consolidating within the $62,700 and $65,550 range over the past two days. Similarly, Ethereum experienced a 6% drop after the halving, marking its worst post-halving performance according to Glassnode.
Glassnode’s on-chain data analysis using the Net Unrealized Profit/Loss (NUPL) metric suggests that both Ethereum and Bitcoin are still in the early stages of a macro uptrend. The data shows a relatively low Realized Cap associated with Long-Term Holders (LTHs) for both assets, indicating potential for further growth.
Glassnode also notes that capital inflows into Ethereum typically lag behind those into Bitcoin. In the current cycle, the peak influx of new capital into Bitcoin occurred 20 days before the peak influx into Ethereum. Furthermore, Glassnode’s analysis of the 30-day change in Realized Cap suggests that Ethereum’s STH Realized Cap has yet to gain momentum in the current cycle.
While the post-halving market action has followed a similar pattern to previous cycles, Glassnode highlights that several data points indicate that Ethereum has underperformed compared to Bitcoin.
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment or trading decisions.