Ether Rebounds 2.5%, Reversing Underperformance Against Bitcoin Amid Bearish Market Sentiment
Ether (ETH) is showing signs of potential upside after underperforming relative to Bitcoin (BTC) in recent months. Over the past 24 hours, Ether has gained 2.5%, even as Bitcoin has slipped slightly, according to CoinDesk. This price move led to the liquidation of $17 million in short positions on derivatives exchanges, suggesting that a shift in sentiment could be underway.
The ETH/BTC ratio recently hit its lowest level since April 2021, as Ether has lagged, dropping over 10% in the past six months, while Bitcoin has surged 22%. Despite this, Ether remains within a steady trading range established since August, with resistance around the $2,700 level, which it failed to break on both September 27 and October 21. Meanwhile, Bitcoin has tested new highs near $73,800, approaching record levels from March, while Ether lingers around $2,000 below its all-time high from November 2021.
Negative sentiment surrounding Ether’s loss of market share, driven by the rise of layer-2 networks, has fueled bearish positioning. These networks have captured some of Ethereum’s transaction volume and liquidity, leading to a decrease in new wallets and transactions on the main network. Yet, DefiLlama data reveals that Ethereum still holds over 55% of total value locked (TVL) across DeFi protocols, topping $50 billion, positioning ETH as a primary beneficiary should capital flow back into altcoins.
The recent liquidation of short positions, combined with ETH’s stronghold in the DeFi space, could set the stage for a short squeeze that drives Ether higher in the near term.
