Bitcoin Nears 100K, Pushing ETH-to-BTC Ratio to March 2021 Low

As Bitcoin ( BTC ) continues to break new price records, currently trading at around $97,500, its dominance over Ether ( ETH ) has grown.

The ETH/BTC ratio on major centralized exchanges (CEXs) like Binance and Coinbase has fallen to its lowest level since March 2021. The metric stood at 0.032, or 3.2%, on Nov. 21, a decrease of over 40% since the beginning of 2024, according to data from TradingView.

However, at the time of writing, the ETH/BTC ratio has recovered slightly and is now trading at 0.034.

ETH/BTC ratio, YTD. Source: TradingView

Trump Re-Election Drives Bitcoin to New Highs

The decline in the ratio, which has been noticeable since July, can be attributed to Bitcoin’s rise, fueled by the re-election of pro-crypto Republican candidate Donald Trump on Nov. 5.

On Nov. 21, Bitcoin set a new all-time high, surpassing $98,300 for the first time.

Market sentiment is bullish, with expectations that Bitcoin will reach $100,000 by the end of the year.

The Crypto Fear & Greed Index, which measures market sentiment for Bitcoin and other cryptocurrencies, is currently at 82 – in the “Extreme Greed” zone.

Crypto Fear & Greed Index score. Source: Alternative.me

Prior to the election, the approval of U.S. spot Bitcoin exchange-traded funds (ETFs) also boosted Bitcoin’s rally throughout 2024.

ETH Struggles Amidst Bitcoin’s Rally

While Bitcoin has thrived, Ether has faced challenges. Despite the overall market rally, ETH has underperformed, declining by over 3% over the past week. However, it has recently started to recover, gaining 7% in the last 24 hours.

In contrast to Bitcoin, U.S. spot Ether ETFs have experienced losses since Nov. 14. Investors appear to be favoring Bitcoin ETFs, with inflows reaching $829.5 million on Nov. 19 and $773.4 million on Nov. 20.

Increased competition from networks like Solana ( SOL ), coupled with regulatory uncertainty, has also contributed to Ether’s underperformance.

Decoupling of Bitcoin and Ether

CryptoQuant founder and CEO Ki Young Ju noted in his X post from Nov. 19 that Ether is becoming less correlated with Bitcoin.

According to the CEO, the 180-day BTC-ETH Pearson correlation is at a three-year low. This means that a 10% rise in Bitcoin could now result in only a 3% gain for Ether.

“Just because Bitcoin is strong doesn’t mean you should buy ETH,” said Ju.“Each asset is now following its own path.”

ETH is becoming less correlated with BTC.

The 180-day BTC-ETH Pearson correlation is at a three-year low. A 10% rise in #Bitcoin could result in only a 3% gain for #Ethereum .

Just because BTC is strong doesn't mean you should buy ETH. Each asset is now following its own path. pic.twitter.com/4Dn4QoInXo

— Ki Young Ju (@ki_young_ju) November 19, 2024