Ethereum’s chart appears to be like “disastrous” — and the ETH/BTC ratio simply confirmed it

Can Ethereum nonetheless declare L1 dominance as Solana features floor and the ETH/BTC ratio crashes beneath 0.022?

ETH/BTC hits a multi-year low

Ethereum (ETH), the world’s second-largest crypto by market cap, is dealing with a sobering actuality examine. The ETH/BTC ratio, a metric used to gauge Ethereum’s energy relative to Bitcoin (BTC), has dropped to 0.022, its lowest degree since December 2020, signaling a pointy decline in Ethereum’s relative efficiency.

Since September 2022, when the ratio hovered round 0.085, Ethereum has shed greater than 73% of its worth relative to Bitcoin. As of this writing, ETH is buying and selling at round $1,880, down 9% over the previous week and a steep 62% from its all-time excessive of $4,890 in November 2021.

In comparison with Bitcoin, which is down simply 10% year-to-date, buying and selling at $84,300 ranges, Ethereum’s decline of 46% in the identical time-frame is greater than 4 occasions deeper.

The declining ratio displays Ethereum’s slipping dominance within the good contract and layer 1 ecosystem, an area it as soon as dominated unchallenged.

As different L1s like Solana (SOL), Binance Chain (BNB), Avalanche (AVAX), and others achieve floor, and as Bitcoin reasserts its dominance, Ethereum seems to be treading water.

Let’s take a more in-depth take a look at what’s driving this imbalance, whether or not Ethereum is genuinely shedding floor, and what it means for the way forward for the L1 blockchain race.

Ethereum’s metrics present indicators of softening

As of Apr. 1, Ethereum’s whole worth locked stands at roughly $50.5 billion, accounting for 52.5% of the overall market. This marks a notable drop from 61.64% in February 2024, pointing to a gradual lack of share within the decentralized finance market.

A part of this shift will be traced to the rise of rivals like Solana, which has seen its TVL improve considerably. Solana’s share has grown from 2.84% to 7.24%, bringing its whole TVL to $6.69 billion, greater than a 2.5x rise in simply over a 12 months.

One rising pattern is the distinction in consumer habits throughout networks. Ethereum continues to draw customers concerned in passive DeFi actions, equivalent to yield farming and staking.

In distinction, Solana’s ecosystem is drawing extra speculative, energetic merchants, significantly in meme tokens and high-frequency DeFi, suggesting that Ethereum’s present use instances, whereas strong, will not be aligned with the place retail consumer exercise is at present trending.

In the meantime, excessive fuel charges, traditionally considered one of Ethereum’s greatest limitations, have improved. Common fuel costs dropped to 1.12 GWEI in March 2025, considerably decrease than ranges seen in earlier years.

However regardless of these enhancements, Ethereum nonetheless stays comparatively costly and slower to make use of in comparison with newer chains, particularly for customers making smaller transactions.

Amid this, whereas Bitcoin ETFs have attracted greater than $36 billion in internet inflows so far, Ethereum ETFs have struggled to seize consideration. In March 2025 alone, internet whole flows into ETH ETFs fell by 9.8%, dropping to $2.43 billion.

On the buying and selling aspect, sentiment round Ethereum seems to be deteriorating. Based on The Kobeissi Letter, quick positioning in Ethereum surged 40% in early February and has risen over 500% since November 2024, marking an unprecedented degree of bearish positioning.

In the meantime, Ethereum’s total market dominance has now dropped beneath 8.4%, its lowest degree in over 4 years. As Milocredit, a crypto mortgage firm, famous, this implies that capital is flowing out of ETH and into different choices, together with Bitcoin, Solana, and rising layer 1 platforms which can be capitalizing on Ethereum’s slowed momentum.

Scalability commerce offs are catching up

For years, Ethereum’s progress narrative has hinged on the promise of scaling. But, as of early 2025, that promise stays largely unfulfilled on the base layer. Regardless of a number of protocol upgrades, Ethereum’s mainnet nonetheless processes simply 10 to 62 transactions per second.

On the time of writing, its efficient throughput hovers round 16 transactions per second—a determine that stands in stark distinction to Solana’s 4,322 TPS. This has change into a key cause why newer customers and functions are selecting to construct elsewhere.

The transition to proof-of-stake through the Merge in 2022 considerably improved Ethereum’s power effectivity, reducing power use by over 99%. Nonetheless, it did little to resolve the community’s core throughput limitations. 

In consequence, Ethereum has more and more relied on layer-2 rollups like Arbitrum (ARB), Optimism (OP), and Base to scale its operations. These networks lengthen Ethereum’s capabilities by processing transactions off-chain and settling them again on the mainnet. 

Though L-2 adoption has lowered consumer prices, it has additionally led to unintended penalties. Exercise is shifting away from Ethereum’s mainnet, drawing each customers and transaction charges towards L-2 ecosystems. 

As one consumer on X famous, “Arbitrum and Optimism are raking in charges… whereas Ethereum’s base layer is popping right into a ghost city.”

This pattern is backed by information. Analysts like Geoff Kendrick at Commonplace Chartered argue that L2s, significantly high-volume ones like Coinbase’s Base, are siphoning off billions in transaction charges that will in any other case circulation by way of Ethereum’s mainnet.

Kendrick estimates that Base alone has eliminated round $50 billion in worth from Ethereum’s market cap by diverting financial exercise. In flip, this reduces the quantity of ETH being burned by way of fuel charges, weakening its deflationary mechanics and the long-promoted narrative of ETH as “ultrasound cash.”

After EIP-1559, Ethereum’s fee-burning mechanism was anticipated to counterbalance issuance. Nonetheless, with exercise now fragmented throughout dozens of rollups and sidechains, total payment burns have dropped considerably.

ETH has as soon as once more change into internet inflationary, now at an annualized fee of 0.5%. In the meantime, staking yields have fallen beneath 2.5%, making ETH much less enticing when in comparison with stablecoin methods providing returns of over 4.5% throughout DeFi platforms.

Even Ethereum’s upcoming improve, Pectra — designed to enhance L2 effectivity by growing blob capability from three to 6 for information availability gained’t do a lot.

Kendrick has said that he doesn’t count on Pectra to reverse the broader ETH/BTC decline, calling the improve inadequate to deal with Ethereum’s underlying structural points.

On the similar time, exercise on Ethereum’s mainnet seems to be drying up. Bots, significantly deal with poisoning bots, at the moment are dominating fuel utilization on high contracts. Fewer natural functions are deploying on to the mainnet.

As one consumer put it, “ETH mainnet is turning into a graveyard.” Whereas this can be an exaggeration, Ethereum’s core layer is shedding its popularity as the first vacation spot for on-chain innovation.

Ethereum value prediction: Is the underside in?

A number of alerts from market analysts level to a large spectrum of doable outcomes, however the dangers seem like stacking up extra rapidly for ETH than the potential tailwinds.

On the macro entrance, Ethereum stays closely tied to the broader threat asset setting. Based on Bloomberg strategist Mike McGlone, “ETH stays carefully correlated with threat belongings,” that means its efficiency is prone to mirror that of U.S. equities and high-beta sectors.

If inventory markets decline additional in 2025, significantly underneath the weight of excessive rates of interest, persistent inflation, or weakening world progress, Ethereum may face intensified downward stress.

McGlone warned that in a deteriorating macro setting, ETH could “doubtlessly revisit the $1,000 degree,” which might characterize a drop of almost 50 % from present ranges.

From a technical standpoint, the value construction can also be exhibiting indicators of pressure. Analyst Mags remarked that Ethereum has “one of many worst charts of all time,” pointing to repeated failures to interrupt above the $4,000 resistance zone throughout this cycle.

After three makes an attempt, ETH not solely did not reclaim its highs but additionally misplaced assist at its mid-range degree and fell beneath an upward-sloping trendline that had held because the earlier market backside.

This kind of breakdown, mixed with the dearth of sturdy assist beneath present ranges, opens the potential for a retest close to the $1,060 vary — a value final seen through the 2022 bear market. As Mags famous, “technically talking, the bearish state of affairs appears to be like extra possible.”

Nonetheless, a extra optimistic perspective got here from dealer Michaël van de Poppe, who noticed that Ethereum could also be exhibiting early indicators of a possible “deviation.”

Based on him, if ETH can cleanly break above the $2,100 to $2,150 zone, it may spark a pointy transfer as much as $2,800, indicating renewed energy available in the market.

He additionally highlighted a current decline within the U.S. Greenback Index as a good macro sign, suggesting {that a} weaker greenback would possibly assist assist a crypto rebound in Q2.

Nonetheless, these bullish situations depend upon Ethereum reclaiming key technical ranges and broader market sentiment turning extra favorable. Till then, the draw back dangers stay extra seen.

Within the quick time period, Ethereum’s trajectory seems carefully tied to macroeconomic cycles and Bitcoin’s positioning. A decisive transfer above $2,150 may mark the beginning of a restoration part. With out that, nonetheless, technical and structural stress is prone to persist.

Commerce fastidiously and by no means make investments greater than you may afford to lose.