The cryptocurrency market has long been dominated by two major players: Bitcoin (BTC) and Ethereum (ETH). While both remain foundational assets in the digital economy, their performance relative to each other has become increasingly divergent. Recently, Ethereum has significantly underperformed Bitcoin, with the ETH/BTC trading pair hitting its lowest level in over three and a half years on September 18 — a point not seen since 2021.
This raises a critical question for traders and investors: Is this historic low a compelling buying opportunity, or is Ethereum poised for further weakness against Bitcoin?
Market Context: Bitcoin Dominance vs. Ethereum’s Lag
Bitcoin has spent much of recent months consolidating within a tight range. Despite the sideways movement, many analysts anticipate a breakout in the fourth quarter of 2025, potentially driving BTC to new all-time highs. Institutional adoption, spot ETF approvals, and macroeconomic tailwinds such as potential rate cuts are fueling this optimism.
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In contrast, Ethereum remains far from its peak price of $4,878 reached in November 2021. According to Polymarket, the world’s largest prediction market platform, there's an 85% probability that Ethereum will not reach a new all-time high in 2025. This bearish sentiment reflects growing skepticism about ETH’s ability to outpace BTC in the near term.
Yet, not all signals point to doom for Ethereum bulls.
A Contrarian Opportunity on the Horizon?
Bitwise Asset Management’s Chief Investment Officer (CIO) recently suggested that Ethereum might be shaping up as “a potential contrarian bet by year-end.” This view hinges on the idea that after prolonged underperformance, sentiment may have become overly negative — creating conditions ripe for a reversal.
To assess this possibility, we must examine the technical structure of the ETH/BTC ratio, which strips out broader crypto market noise and reveals how Ethereum is truly performing against the dominant cryptocurrency.
Long-Term Technical Outlook: The Symmetrical Triangle
On the weekly chart, the ETH/BTC pair is forming a symmetrical triangle pattern — a classic sign of market indecision where neither bulls nor bears can gain decisive control. Price action shows buyers defending a key support line while sellers resist advances near a declining resistance boundary.
Both the 50-day and 200-day moving averages are sloping downward, reinforcing bearish momentum. Meanwhile, the Relative Strength Index (RSI) is approaching oversold territory, indicating that downward pressure may be nearing exhaustion.
If the price bounces from the lower trendline and clears both moving averages, it could signal stabilization within the triangle. However, the next major directional move will likely come only after a confirmed breakout — either above resistance or below support.
A breakout above the triangle could target 0.18 BTC per ETH, surpassing the previous high of 0.15 BTC set in 2021. Conversely, a breakdown could accelerate losses toward the lower boundary of the longer-term descending channel.
Short-Term Signs of Strength Emerge
Zooming into the daily chart, ETH/BTC continues to trade within a well-defined downward channel, characterized by lower highs and lower lows — a textbook bearish trend.
Despite this, there are emerging signs of potential bullish divergence:
- The RSI has formed a positive divergence, suggesting that selling momentum is weakening even as prices make new lows.
- The 20-day exponential moving average (currently around 0.04 BTC) has begun to flatten, hinting at reduced selling pressure.
A sustained close above the 50-day simple moving average (also near 0.04 BTC) would be an early signal that bears are losing grip. More importantly, a confirmed breakout above the upper trendline of the channel would indicate a shift in trend dynamics, potentially marking the start of a recovery phase for Ethereum.
However, failure to hold above key support levels could invalidate this optimistic scenario.
Key Risk: Breakdown Below Critical Support
For now, 0.038 BTC stands as a crucial support level. A decisive break below this point would undermine recent bullish signals and likely trigger further downside toward the lower end of the channel.
Such a move would confirm that Ethereum continues to lose ground against Bitcoin — possibly due to weaker demand, slower innovation cycles, or reduced yield appeal in decentralized finance (DeFi) compared to earlier years.
Why Ethereum Could Reclaim Momentum
Despite current headwinds, several catalysts could help Ethereum regain strength:
- Ethereum Network Upgrades: Ongoing improvements like Proto-Danksharding aim to drastically reduce Layer-2 transaction costs, boosting scalability and adoption.
- Spot ETH ETF Approval: Regulatory clarity and potential approval of spot Ethereum ETFs in 2025 could unlock significant institutional inflows.
- DeFi and NFT Revival: A resurgence in decentralized finance activity or NFT innovation could reignite developer and user interest.
- Staking Yields: With staking rewards still attractive (~3–5%), ETH offers income-generating potential unlike BTC.
👉 Explore how upcoming blockchain upgrades might influence asset valuations.
These fundamentals suggest that while Ethereum may be out of favor today, it remains one of the most robust and adaptable platforms in the crypto ecosystem.
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Frequently Asked Questions (FAQ)
Q: Why is ETH performing worse than BTC recently?
A: Several factors contribute to Ethereum's underperformance, including slower regulatory progress on spot ETFs compared to Bitcoin, reduced DeFi yields, and stronger institutional preference for BTC as a "digital gold" asset.
Q: What does the ETH/BTC ratio tell us?
A: The ETH/BTC ratio measures how many ETH you can buy with one BTC. It helps isolate Ethereum’s performance from overall market movements, revealing whether altcoins like ETH are gaining or losing strength relative to Bitcoin.
Q: Can Ethereum outperform Bitcoin in 2025?
A: While unlikely according to current sentiment (per Polymarket), a spot ETH ETF approval or major network upgrade could spark renewed interest and drive outperformance in the second half of 2025.
Q: What is a symmetrical triangle pattern?
A: It’s a neutral chart pattern formed by converging support and resistance lines. It typically precedes a significant breakout — either up or down — once price escapes the narrowing range.
Q: What would confirm a bullish reversal in ETH/BTC?
A: A sustained close above the 50-day SMA (around 0.04 BTC) followed by a breakout above the downward channel resistance would strongly suggest a trend change.
Q: Where is key support for ETH/BTC?
A: Immediate support sits at 0.038 BTC. A break below this level could lead to further declines toward 0.03 BTC or lower.
Final Thoughts: Patience Meets Opportunity
While Ethereum continues to lag behind Bitcoin, technical patterns suggest we may be approaching a pivotal moment. The formation of a long-term symmetrical triangle on the weekly chart implies that a major move — up or down — could unfold in the coming months.
For contrarian investors, today’s pessimism may present a strategic entry point. But confirmation is key: traders should wait for clear bullish signals such as sustained breaks above moving averages and channel resistance before committing capital.
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Ultimately, Ethereum’s fate relative to Bitcoin will depend not just on price action, but on adoption trends, regulatory outcomes, and technological evolution. In a maturing crypto market, fundamentals matter more than ever — and Ethereum still has strong cards to play.