According to CoinDesk, Ether (ETH) has shown a notable increase of 2.5% in the past 24 hours, contrasting with a slight decline in Bitcoin (BTC). This rise has led to the liquidation of $17 million worth of short bets on Ether across derivatives exchanges.
Ether has been underperforming against Bitcoin in recent months, with a more than 10% decline over the past six months compared to Bitcoin's 22% advance. This has brought the ETH/BTC ratio to its weakest level since April 2021. Despite this, Ether has remained within the same trading range since early August, with the current level of $2,700 seeing two firm rejections on September 27 and October 21. Meanwhile, Bitcoin surged from below $60,000, recently testing its record high of nearly $73,800. Ether remains about $2,000 below its record high set in November 2021.
The relative underperformance of Ether has led to widespread bearish sentiment and disappointment in the asset, which has a market cap of $322 billion. One factor contributing to this negative sentiment is the rise of layer-2 networks, which are taking market share, liquidity, and volume away from the main Ethereum network. Key metrics such as new wallets and the number of transactions have also continued to decline, leading traders to increase short positions, potentially setting the stage for a turbulent short squeeze.
Despite these challenges, data from DefiLlama indicates that Ethereum still commands more than 55% of the total value locked (TVL) across all DeFi networks and protocols, with the figure exceeding $50 billion. This suggests that when capital flows into altcoins, Ether is well-positioned to be one of the main beneficiaries.
