The cryptocurrency market is once again witnessing a pivotal moment as the ETH/BTC exchange rate plummeted to 0.01924 on April 14—its lowest level since January 2020. This milestone underscores a growing narrative: while Bitcoin continues to dominate both in price performance and investor sentiment, Ethereum appears to be struggling to maintain its historical momentum. Once hailed as the backbone of decentralized innovation, Ethereum now faces mounting pressure from competing blockchains, shifting capital flows, and weakening on-chain activity.
But beneath the surface, signs of potential resurgence are emerging. From whale movements to upcoming protocol upgrades, this article dives into recent on-chain and exchange data to explore whether Ethereum can reclaim its position as the leading smart contract platform.
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Chain Activity Shows Signs of Retreat
Recent on-chain data reveals a noticeable pullback in Ethereum’s ecosystem activity—both in usage and investor confidence.
According to Arkham Intelligence, a long-standing Ethereum whale—believed to have acquired 100,000 ETH during the network’s early days—has offloaded 4,180 ETH on Kraken since April, amounting to roughly $7.05 million. Another notable address (0x62A) sold 4,482 ETH at an average price of $1,572 around April 12, signaling growing profit-taking amid weakening price action.
One particularly large holder reduced their position by 35,881 ETH at $1,562 per coin on April 10, closing leveraged positions before selling an additional 2,000 ETH at $1,575. Despite these sales, the wallet still holds 688 ETH, suggesting partial conviction remains.
This trend reflects broader market dynamics. Since Bitcoin’s April 2024 halving, Ethereum has underperformed BTC by nearly 40%, marking the first time in its history that ETH has remained weak throughout an entire post-halving cycle. Meanwhile, alternative networks like Solana are gaining traction—SOL/ETH is up 49% year-to-date, reaching 0.0817.
DeFiLlama data shows that Ethereum’s decentralized exchange (DEX) revenue has dropped to just $1.1 million over the past 24 hours. Total Value Locked (TVL) has also fallen sharply—from a peak near $80 billion to $46.9 billion—representing a near 50% decline. This contraction highlights reduced liquidity and declining user engagement across major DeFi protocols.
Key On-Chain Metrics Signal Weakness
Low network utilization further confirms the slowdown:
- Gas fees have consistently hovered around 2 Gwei, indicating minimal congestion and low demand for block space.
- Monthly active addresses dipped below 15 million in March, reflecting tepid user adoption.
- Daily transaction volume on Ethereum now averages under $3 billion, down from previous highs.
Compounding these trends, validator rewards on the Ethereum mainnet fell below $200 million in March—the lowest monthly return since the Merge. With fewer economic incentives and limited high-impact use cases gaining mainstream traction, investor enthusiasm has cooled.
CEX Trends and ETF Outflows Signal Bearish Sentiment
Centralized exchanges (CEXs) offer another lens into market behavior—and the data isn’t encouraging for Ethereum bulls.
Bitcoin continues to dominate trading volume across major platforms, with stronger volatility and higher liquidity attracting institutional and retail capital alike. In contrast, Ethereum’s spot trading activity has lagged, and its derivatives markets show reduced open interest.
More concerning is the persistent outflow from spot Ethereum ETFs. Over the past month, U.S.-listed ETH ETFs recorded multiple days of net outflows, with one day seeing withdrawals totaling $75 million. These outflows suggest growing skepticism among institutional investors about Ethereum’s near-term value proposition.
Market analysts attribute this shift to several factors:
- Increasing competition from Layer 2 solutions and alternative Layer 1 chains.
- Slower-than-expected adoption of Ethereum-based applications.
- Regulatory uncertainty surrounding staking and token classification.
As capital concentrates in Bitcoin—seen increasingly as “digital gold”—risk appetite for altcoins like Ethereum remains subdued.
Macro Environment: Bitcoin Dominance Soars
Bitcoin’s market dominance has surged past 62.46%, a level not seen in years. This concentration of capital reflects a “Bitcoin-first” investment strategy driven by macroeconomic uncertainty and regulatory clarity favoring BTC.
Moreover, the Crypto Fear & Greed Index remains firmly in “fear” territory, reinforcing risk-off behavior. Investors are seeking safety in Bitcoin, which many now view as the most battle-tested and institutionally accepted digital asset.
Even U.S. state-level financial strategies are aligning with this trend. Several states have proposed including Bitcoin—and only Bitcoin—in their strategic reserve plans, further cementing its status as the flagship crypto asset.
For Ethereum, this environment creates a challenging backdrop. If the ETH/BTC ratio falls below 0.018 in Q2 2025, it could trigger cascading liquidations of leveraged long positions, exacerbating downward pressure.
However, there are glimmers of hope on the horizon.
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Catalysts Ahead: Pectra Upgrade and Institutional Liquidity
Despite current headwinds, Ethereum is not without catalysts.
One key development is the upcoming Pectra upgrade, which aims to enhance scalability and user experience through critical features like account abstraction (AA). This innovation could streamline wallet interactions, reduce transaction friction, and open doors for mass adoption—especially in enterprise and institutional use cases.
Vitalik Buterin has reiterated his vision: transforming Ethereum’s Layer 1 into the foundational “world computer” for global decentralized systems. The Pectra upgrade brings that vision closer to reality by improving security, efficiency, and developer flexibility.
Additionally, new sources of institutional liquidity may soon flow into the ecosystem. On March 25, former U.S. President Donald Trump’s family launched USD1, a dollar-pegged stablecoin issued via World Liberty Financial (WLFI). The stablecoin will initially launch on Ethereum and BNB Chain, targeting institutional-grade liquidity provision.
While politically charged, the move underscores Ethereum’s continued relevance as a preferred settlement layer for new financial instruments—even those from unexpected corners of the world.
This potential influx of institutional capital could stabilize demand for ETH, particularly if USD1 gains traction in traditional finance circles.
Frequently Asked Questions (FAQ)
Q: Why is ETH/BTC falling so much?
A: The decline reflects stronger investor preference for Bitcoin amid macro uncertainty, ETF flows favoring BTC, reduced on-chain activity on Ethereum, and increased competition from other blockchains like Solana.
Q: Does low gas fee mean Ethereum is failing?
A: Not necessarily. Low gas fees indicate reduced network congestion and lower demand—but they can also signal a temporary lull before new applications drive renewed usage. It’s a symptom of current market conditions rather than systemic failure.
Q: Can Ethereum recover its dominance?
A: Yes—especially if upcoming upgrades like Pectra deliver tangible improvements in scalability and usability. Renewed institutional interest and ecosystem innovations could reignite growth.
Q: Are whale sell-offs a bad sign?
A: Large sell-offs can signal profit-taking or loss of confidence, but many whales still hold significant ETH balances. Context matters—some sales may be part of portfolio rebalancing rather than full exits.
Q: What happens if ETH/BTC drops below 0.018?
A: A drop below 0.018 could trigger widespread liquidations of leveraged long positions, leading to short-term price spirals. However, such levels might also present long-term buying opportunities.
Q: How does USD1 impact Ethereum?
A: As a new stablecoin launching on Ethereum, USD1 introduces fresh liquidity and transaction volume potential. If adopted widely, it could boost demand for ETH as a settlement asset.
With technical upgrades on the horizon and new financial instruments choosing Ethereum as their base layer, the network may be laying the groundwork for a comeback. While short-term sentiment remains cautious, the long-term fundamentals still hold promise.
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