cryptoglobe.com
The second-largest cryptocurrency by market capitalization Ethereum ($ETH) has significantly underperformed Bitcoin in recent months to the point the ETH/BTC ratio, a key indicator of the relative strength of the two cryptocurrencies, has plummeted to its lowest level since April 2021, reaching a precarious 0.044.
According to data shared by leading institutional digital asset data provider CCData, ETH has been consistently underperforming Bitcoin. Meanwhile ETH rival Solana has bucked the trend, with the SOL/ETH ratio steadily climbing to now be near a new all-time high.
Chart of the Week: #Ethereum has significantly underperformed vs #Bitcoin, with the ETH/BTC ratio reaching its lowest level since April 2021, at 0.044.
— CCData (@CCData_io) August 6, 2024
Meanwhile, the SOL/ETH ratio continues to trend upwards, nearing its all-time high. pic.twitter.com/fZxeHpoQpL
Bitcoin has been outperforming most of the cryptocurrency market, to the point that its market share of the cryptocurrency space is now at 55%, up from around 38% back in 2022.
Ethereum’s market share over the same period dropped from around 18% to roughly 16%, while that of leading stablecoin USDT went from over 7% to less than 5% over the same period.
Bitcoin’s dominance grew after the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States and amid a significant price rise. Notably, the cryptocurrency market recently saw a significant sell-off that saw its Crypto Fear & Greed Index plunge into its lowest level in two years signaling “extreme fear” among investors for the first time since July 2022.
The index, which utilizes multiple sources, including social media, to produce a relative number that reflects investor sentiment, has risen from 6 when BTC dropped below $18,000 last year. Per the index, behavior in the cryptocurrency market is “very emotional” and people “get greedy when the market is rising which results in FOMO (Fear of missing out).”
The index also adds that people “often sell their coins in irrational reaction of seeing red numbers.” The index entered “extreme fear” levels after a massive cryptocurrency market sell-off briefly saw the price of Bitcoin dip below the $50,000 mark before recovering.
Featured image via Pixabay.