Can ETH/BTC Gains Last?

Ether is yet again showing the early signs of a rally. Can bulls finally buck a two-year downtrend in its relative valuation?

What’s the Scoop?

• Gaining Ground: ETH/BTC bottomed out mere hours after America’s Federal Reserve cut interest rates on Wednesday. The “Ratio” has fallen over 50% since the Merge in September 2022, but is up 10% off the local lows and will enjoy its third instance of consecutive green weeks in 2024, assuming the gains can hold until Sunday.
• Chasing the Pump: While Ethereum open interest (OI), a measure for the notional value leveraged long and short positions held by traders, increased by 20% this week, the metric remains a 35% below its 2024 highs, starkly contrasting to the relative stability demonstrated in BTC/SOL OI and the new all-time highs achieved by select alts.

Bankless Take:

Ethereum’s underperformance against alternative cryptocurrencies with hotter narratives has been a multi-year theme. Decisive evidence of Ether weakness is prompting bull to confront the issue with renewed resolve, and while mechanical short covering induced by the crypto market’s recent recovery is likely contributing to the outsized ETH rally, sustained Ratio resurgence would speak to renewed excitement in Ethereum’s fundamental case and its various narratives.