Can Ethereum nonetheless declare L1 dominance as Solana features floor and the ETH/BTC ratio crashes beneath 0.022?
ETH/BTC hits a multi-year low
Ethereum (ETH), the world’s second-largest crypto by market cap, is dealing with a sobering actuality verify. The ETH/BTC ratio, a metric used to gauge Ethereum’s power relative to Bitcoin (BTC), has dropped to 0.022, its lowest stage since December 2020, signaling a pointy decline in Ethereum’s relative efficiency.
Since September 2022, when the ratio hovered round 0.085, Ethereum has shed greater than 73% of its worth relative to Bitcoin. As of this writing, ETH is buying and selling at round $1,880, down 9% over the previous week and a steep 62% from its all-time excessive of $4,890 in November 2021.
In comparison with Bitcoin, which is down simply 10% year-to-date, buying and selling at $84,300 ranges, Ethereum’s decline of 46% in the identical time-frame is greater than 4 instances deeper.
The declining ratio displays Ethereum’s slipping dominance within the good contract and layer 1 ecosystem, an area it as soon as dominated unchallenged.
As different L1s like Solana (SOL), Binance Chain (BNB), Avalanche (AVAX), and others acquire floor, and as Bitcoin reasserts its dominance, Ethereum seems to be treading water.
Let’s take a more in-depth have a look at what’s driving this imbalance, whether or not Ethereum is genuinely shedding floor, and what it means for the way forward for the L1 blockchain race.
Ethereum’s metrics present indicators of softening
As of Apr. 1, Ethereum’s whole worth locked stands at roughly $50.5 billion, accounting for 52.5% of the overall market. This marks a notable drop from 61.64% in February 2024, pointing to a gradual lack of share within the decentralized finance market.
A part of this shift might be traced to the rise of rivals like Solana, which has seen its TVL improve considerably. Solana’s share has grown from 2.84% to 7.24%, bringing its whole TVL to $6.69 billion, greater than a 2.5x rise in simply over a 12 months.
One rising pattern is the distinction in person habits throughout networks. Ethereum continues to draw customers concerned in passive DeFi actions, resembling yield farming and staking.
In distinction, Solana’s ecosystem is drawing extra speculative, energetic merchants, notably in meme tokens and high-frequency DeFi, suggesting that Ethereum’s current use circumstances, whereas strong, will not be aligned with the place retail person exercise is at the moment trending.
In the meantime, excessive fuel charges, traditionally one among Ethereum’s greatest obstacles, have improved. Common fuel costs dropped to 1.12 GWEI in March 2025, considerably decrease than ranges seen in earlier years.
However regardless of these enhancements, Ethereum nonetheless stays comparatively costly and slower to make use of in comparison with newer chains, particularly for customers making smaller transactions.
Amid this, whereas Bitcoin ETFs have attracted greater than $36 billion in web inflows up to now, Ethereum ETFs have struggled to seize consideration. In March 2025 alone, web whole flows into ETH ETFs fell by 9.8%, dropping to $2.43 billion.
On the buying and selling aspect, sentiment round Ethereum seems to be deteriorating. Based on The Kobeissi Letter, quick positioning in Ethereum surged 40% in early February and has risen over 500% since November 2024, marking an unprecedented stage of bearish positioning.
In the meantime, Ethereum’s general market dominance has now dropped beneath 8.4%, its lowest stage in over 4 years. As Milocredit, a crypto mortgage firm, famous, this implies that capital is flowing out of ETH and into different choices, together with Bitcoin, Solana, and rising layer 1 platforms which can be capitalizing on Ethereum’s slowed momentum.
Scalability commerce offs are catching up
For years, Ethereum’s progress narrative has hinged on the promise of scaling. But, as of early 2025, that promise stays largely unfulfilled on the base layer. Regardless of a number of protocol upgrades, Ethereum’s mainnet nonetheless processes simply 10 to 62 transactions per second.
On the time of writing, its efficient throughput hovers round 16 transactions per second—a determine that stands in stark distinction to Solana’s 4,322 TPS. This has develop into a key cause why newer customers and purposes are selecting to construct elsewhere.
The transition to proof-of-stake through the Merge in 2022 considerably improved Ethereum’s power effectivity, slicing power use by over 99%. Nevertheless, it did little to resolve the community’s core throughput limitations.
Because of this, Ethereum has more and more relied on layer-2 rollups like Arbitrum (ARB), Optimism (OP), and Base to scale its operations. These networks lengthen Ethereum’s capabilities by processing transactions off-chain and settling them again on the mainnet.
Though L-2 adoption has lowered person prices, it has additionally led to unintended penalties. Exercise is shifting away from Ethereum’s mainnet, drawing each customers and transaction charges towards L-2 ecosystems.
As one person on X famous, “Arbitrum and Optimism are raking in fees… while Ethereum’s base layer is turning into a ghost town.”
This pattern is backed by information. Analysts like Geoff Kendrick at Normal Chartered argue that L2s, notably high-volume ones like Coinbase’s Base, are siphoning off billions in transaction charges that may in any other case circulation by Ethereum’s mainnet.
Kendrick estimates that Base alone has eliminated round $50 billion in worth from Ethereum’s market cap by diverting financial exercise. In flip, this reduces the quantity of ETH being burned by fuel charges, weakening its deflationary mechanics and the long-promoted narrative of ETH as “ultrasound money.”
After EIP-1559, Ethereum’s fee-burning mechanism was anticipated to counterbalance issuance. Nevertheless, with exercise now fragmented throughout dozens of rollups and sidechains, general payment burns have dropped considerably.
ETH has as soon as once more develop into web inflationary, now at an annualized price of 0.5%. In the meantime, staking yields have fallen beneath 2.5%, making ETH much less engaging when in comparison with stablecoin methods providing returns of over 4.5% throughout DeFi platforms.
Even Ethereum’s upcoming improve, Pectra — designed to enhance L2 effectivity by growing blob capability from three to 6 for information availability received’t do a lot.
Kendrick has acknowledged that he doesn’t anticipate Pectra to reverse the broader ETH/BTC decline, calling the improve inadequate to deal with Ethereum’s underlying structural points.
On the identical time, exercise on Ethereum’s mainnet seems to be drying up. Bots, notably handle poisoning bots, are actually dominating fuel utilization on prime contracts. Fewer natural purposes are deploying on to the mainnet.
As one person put it, “ETH mainnet is becoming a graveyard.” Whereas this can be an exaggeration, Ethereum’s core layer is shedding its popularity as the first vacation spot for on-chain innovation.
Ethereum value prediction: Is the underside in?
A number of indicators from market analysts level to a large spectrum of attainable outcomes, however the dangers seem like stacking up extra shortly for ETH than the potential tailwinds.
On the macro entrance, Ethereum stays closely tied to the broader threat asset atmosphere. Based on Bloomberg strategist Mike McGlone, “ETH remains closely correlated with risk assets,” which means its efficiency is more likely to replicate that of U.S. equities and high-beta sectors.
If inventory markets decline additional in 2025, notably beneath the load of excessive rates of interest, persistent inflation, or weakening international progress, Ethereum may face intensified downward strain.
McGlone warned that in a deteriorating macro atmosphere, ETH might “potentially revisit the $1,000 level,” which might signify a drop of practically 50 p.c from present ranges.
From a technical standpoint, the value construction can also be displaying indicators of pressure. Analyst Mags remarked that Ethereum has “one of the worst charts of all time,” pointing to repeated failures to interrupt above the $4,000 resistance zone throughout this cycle.
After three makes an attempt, ETH not solely did not reclaim its highs but additionally misplaced help at its mid-range stage and fell beneath an upward-sloping trendline that had held for the reason that earlier market backside.
One of these breakdown, mixed with the dearth of robust help beneath present ranges, opens the potential for a retest close to the $1,060 vary — a value final seen in the course of the 2022 bear market. As Mags famous, “technically speaking, the bearish scenario looks more likely.”
Nevertheless, a extra optimistic perspective got here from dealer Michaël van de Poppe, who noticed that Ethereum could also be displaying early indicators of a possible “deviation.”
Based on him, if ETH can cleanly break above the $2,100 to $2,150 zone, it may spark a pointy transfer as much as $2,800, indicating renewed power out there.
He additionally highlighted a current decline within the U.S. Greenback Index as a good macro sign, suggesting {that a} weaker greenback may assist help a crypto rebound in Q2.
Nonetheless, these bullish eventualities rely upon Ethereum reclaiming key technical ranges and broader market sentiment turning extra favorable. Till then, the draw back dangers stay extra seen.
Within the quick time period, Ethereum’s trajectory seems carefully tied to macroeconomic cycles and Bitcoin’s positioning. A decisive transfer above $2,150 may mark the beginning of a restoration part. With out that, nonetheless, technical and structural strain is more likely to persist.
Commerce rigorously and by no means make investments greater than you’ll be able to afford to lose.
Disclosure: This text doesn’t signify funding recommendation. The content material and supplies featured on this web page are for academic functions solely.
