Ethereum has been lagging behind Bitcoin in recent days despite being the second largest blockchain application in its biggest update. Although Ethereum’s long-awaited proof-of-stake upgrade is imminent, Bitcoin continues to gain attention.
On Monday, Bitcoin continued to rise and is now valued at $22,229. Ethereum is currently trading at $1,715 despite a 3.3% decline. The second cryptocurrency correction occurred despite the fact that the “consolidation” is getting closer and stocks are generally trading higher. To start the week (the S&P 500 gained 0.74%, the Dow Jones gained 0.54% and the Nasdaq gained 0.55%).
Bitcoin is on the rise
Bitcoin has shown strength since Wednesday, when it broke the $18,600 resistance. Since then, the leading digital currency has gained about 20%. Furthermore, the monthly RSI is showing a positive divergence for the first time since September 2021 while the weekly RSI is showing a divergence for the first time since March.
Notably, the ETH:BTC ratio has been trending lower since Wednesday, when it hit a 2022 high of 0.085. It is currently down 9.2%, trading at 0.077. The ratio had already reached 0.053 before Ethereum led the market back in June. For ETH:BTC, a further decline of 33.49% is needed to return to the bottom of its range. The amount of ETH required to buy one BTC is called a “stake”. At a ratio of 0.077, 13 ETH equals one BTC.
TradingView reports that BTC’s overall market dominance, which is the top cryptocurrency percentage of the total cryptocurrency market cap, has risen to 41.28% since breaking below its multi-year support level of 39.79%. Despite growing interest in its biggest update, Ethereum is losing ground to Bitcoin.
A 99% reduction in energy consumption and a 90% reduction in ETH emission will follow from the blockchain “merger” from Proof-of-Work to Proof-of-Stake this week. Although The Merge is expected to deliver as early as September 15, Ethereum has yet to reach its August high of $2015.
It is possible that the merger will turn into a “sell news” event that will trigger a sell-off after the fact, even if it leads to a decrease in supply that could benefit the price of ETH in the long run.
Ethereum may be overshadowed before its biggest update due to Bitcoin’s growing dominance and increasing ratio between the two digital currency assets.