The price of Ethereum (ETH) has been lagging behind Bitcoin’s (BTC) gains in 2024, but analysts from Glassnode suggest that there may be better days ahead.
Data from Cointelegraph Markets Pro and TradingView shows that 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 since April 2021.
Glassnode explains that Ethereum’s underperformance compared to Bitcoin is due to a “measurable lag in speculative interest” from new investors. The report defines the Short-Term Holder (STH) cohort as investors who acquired their coins within the last 155 days and are considered a proxy for new investor demand. While Bitcoin experienced a noticeable increase in speculative activity leading up to all-time highs in March, Ethereum has not seen the same level of capital accumulation.
Glassnode’s on-chain data reveals that Bitcoin’s STH-Realized Cap is nearly at the same level as the previous bull run peak, while Ethereum’s STH-Realized Cap is still less than half of the previous cycle levels. This suggests a lackluster inflow of new capital into Ethereum.
Historically, the price of Ether has closely followed Bitcoin’s price movements, and recent price action reflects this relationship. After the fourth halving, Bitcoin experienced a sell-off, dropping 11% to a two-month low of $56,500 on May 1. Since then, Bitcoin’s price has recovered and has been consolidating within the $62,700 and $65,550 price range. Ethereum also experienced a similar correction after the halving, with a 6% drop, marking its worst post-halving performance.
Glassnode notes that while Bitcoin’s price fell by 20.3% from its all-time high, the deepest correction on a closing basis since November 2022, both Ether and BTC still have a relatively low Realized Cap associated with Long-Term Holders (LTHs). This suggests that the market is still in the early stages of a macro uptrend.
Glassnode’s earlier report established that capital inflows into Ethereum tend to lag behind those into Bitcoin. For example, during the 2021 cycle, the peak influx of new capital into Bitcoin occurred 20 days before the peak influx into Ethereum. Glassnode analysts found that Ethereum’s STH Realized Cap has yet to pick up momentum in the current cycle when monitoring the rotation of capital between the two assets.
In conclusion, Glassnode suggests that while the post-halving market action has followed a similar pattern to previous cycles, Ethereum has underperformed relative to Bitcoin. This article does not provide investment advice, and readers should conduct their own research before making any decisions.