Ethereum Price Suffers 77% Crash Against Bitcoin, On-Chain Deep Dive Reveals Reasons Why

Despite rolling out a lot of upgrades and improvements, the Ethereum price continues to lag behind Bitcoin (BTC) by a large margin. Reports reveal that ETH has suffered a staggering 77% value crash in opposition to BTC — a decline possible fueled by a mixture of technical, macro, and sentiment-driven elements. Notably, On-chain analytics platform, Santiment has now pinpointed and damaged down the important thing causes behind these value struggles. 

Ethereum Price Nosedives Against Bitcoin

On April 11, Santiment launched an in depth report on Ethereum, highlighting its almost four-year underperformance and the explanations behind it. Ethereum, as soon as revered because the cryptocurrency most definitely to dethrone Bitcoin, has lately suffered a brutal price decline when measured immediately in opposition to BTC.

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According to Santiment’s on-chain information, Ethereum has crashed by roughly 77% in opposition to Bitcoin since December 2021. While the greenback worth of ETH hasn’t utterly collapsed, particularly in comparison with different altcoins, the long-term BTC/ETH ratio nonetheless paints a ugly image for Ethereum holders. 

Notably, Ethereum has additionally failed to recover wherever close to its November 2021 all-time excessive of $4,760. In distinction, Bitcoin has surged ahead, reclaiming a lot of its market dominance and outpacing ETH throughout virtually each timeframe. 

This disparity has led many merchants and former maximalists to check ETH to a “shitcoin.” Even worse, numerous mid to low-cap altcoins have already outperformed Ethereum over the brief, mid, and long-term timeframes, inflicting additional embarrassment for the world’s second-largest cryptocurrency by market capitalization. Based on Santiment’s report, the ETH/BTC price ratio chart alone is sufficient to set off doubt and uncertainty amongst long-term holders.

Behind The Scenes Of Ethereum Price Struggles

Beyond value motion and market volatility, Santiment reveals that there are basic causes for Ethereum’s sluggish performance through the years. Some of the foremost criticisms that analysts and merchants have pinpointed embody technical, sentimental, and regulatory points.

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Ironically, Ethereum’s Layer 2 solutions are one of many key drivers of its underperformance. L2 options like Arbitrum, Optimism, and zkSync are reportedly cannibalizing exercise on the mainnet, taking investments from ETH whereas spreading investor consideration skinny. 

Secondly, Ethereum appears to wrestle with advanced roadmaps and communication, which has led to investor confusion. Major updates like The Merge and Shanghai have been troublesome for buyers to grasp, making ETH really feel much less accessible than BTC. 

Thirdly, customers stay pissed off by Ethereum’s comparatively high gas fees and the gradual rollout of key upgrades. This has pushed them towards extra reasonably priced and quicker alternate options, considerably decreasing adoption.

Another main cause for Ethereum’s crash in opposition to Bitcoin is ongoing regulatory considerations. Unlike Bitcoin, which has a extra established authorized precedent, Ethereum faces fixed uncertainty about whether or not it could possibly be labeled a security. 

Other factors embody ETH’s lack of funding enchantment. While Bitcoin maintains the title as a stable digital gold, Ethereum seems to be caught in between, having no clear or enticing funding narrative. Moreover, newer blockchains like Solana and Cardano are additionally attracting a big variety of customers with cheaper and quicker options, finally pulling investments away from ETH.

The last cause Santiment has recognized for Ethereum’s long-term value descent is rising selling pressure. Post-upgrade withdrawals of stakes ETHs have created regular sell-side stress, limiting development and momentum in comparison with Bitcoin.

Featured picture from Unsplash, chart from Tradingview.com