ETH/BTC just hit its lowest point since 2020 — and the bleed may not be over

Can Ethereum still claim L1 dominance as Solana gains ground and the ETH/BTC ratio crashes below 0.022?
Table of Contents
ETH/BTC hits a multi-year low
Ethereum (ETH), the world’s second-largest crypto by market cap, is facing a sobering reality check. The ETH/BTC ratio, a metric used to gauge Ethereum’s strength relative to Bitcoin (BTC), has dropped to 0.022, its lowest level since December 2020, signaling a sharp decline in Ethereum’s relative performance.
Since September 2022, when the ratio hovered around 0.085, Ethereum has shed more than 73% of its value relative to Bitcoin. As of this writing, ETH is trading at around $1,880, down 9% over the past week and a steep 62% from its all-time high of $4,890 in November 2021.
Compared to Bitcoin, which is down just 10% year-to-date, trading at $84,300 levels, Ethereum’s decline of 46% in the same time frame is more than four times deeper.
The declining ratio reflects Ethereum’s slipping dominance in the smart contract and layer 1 ecosystem, a space it once ruled unchallenged.
As other L1s like Solana (SOL), Binance Chain (BNB), Avalanche (AVAX), and others gain ground, and as Bitcoin reasserts its dominance, Ethereum appears to be treading water.
Let’s take a closer look at what’s driving this imbalance, whether Ethereum is genuinely losing ground, and what it means for the future of the L1 blockchain race.
Ethereum’s metrics show signs of softening
As of Apr. 1, Ethereum’s total value locked stands at approximately $50.5 billion, accounting for 52.5% of the total market. This marks a notable drop from 61.64% in February 2024, pointing to a gradual loss of share in the decentralized finance market.
Part of this shift can be traced to the rise of competitors like Solana, which has seen its TVL increase substantially. Solana’s share has grown from 2.84% to 7.24%, bringing its total TVL to $6.69 billion, more than a 2.5x rise in just over a year.
One emerging trend is the difference in user behavior across networks. Ethereum continues to attract users involved in passive DeFi activities, such as yield farming and staking.
In contrast, Solana’s ecosystem is drawing more speculative, active traders, particularly in meme tokens and high-frequency DeFi, suggesting that Ethereum’s existing use cases, while robust, may not be aligned with where retail user activity is currently trending.
Meanwhile, high gas fees, historically one of Ethereum’s biggest barriers, have improved. Average gas prices dropped to 1.12 GWEI in March 2025, significantly lower than levels seen in previous years.
But despite these improvements, Ethereum still remains relatively expensive and slower to use compared to newer chains, especially for users making smaller transactions.
Amid this, while Bitcoin ETFs have attracted more than $36 billion in net inflows to date, Ethereum ETFs have struggled to capture attention. In March 2025 alone, net total flows into ETH ETFs fell by 9.8%, dropping to $2.43 billion.
On the trading side, sentiment around Ethereum appears to be deteriorating. According to The Kobeissi Letter, short positioning in Ethereum surged 40% in early February and has risen over 500% since November 2024, marking an unprecedented level of bearish positioning.
Meanwhile, Ethereum’s overall market dominance has now dropped below 8.4%, its lowest level in over four years. As Milocredit, a crypto mortgage company, noted, this suggests that capital is flowing out of ETH and into other options, including Bitcoin, Solana, and emerging layer 1 platforms that are capitalizing on Ethereum’s slowed momentum.
Scalability trade offs are catching up
For years, Ethereum’s growth narrative has hinged on the promise of scaling. Yet, as of early 2025, that promise remains largely unfulfilled at the base layer. Despite multiple protocol upgrades, Ethereum’s mainnet still processes just 10 to 62 transactions per second.
At the time of writing, its effective throughput hovers around 16 transactions per second—a figure that stands in stark contrast to Solana’s 4,322 TPS. This has become a key reason why newer users and applications are choosing to build elsewhere.
The transition to proof-of-stake via the Merge in 2022 significantly improved Ethereum’s energy efficiency, cutting energy use by over 99%. However, it did little to resolve the network’s core throughput limitations.
As a result, Ethereum has increasingly relied on layer-2 rollups like Arbitrum (ARB), Optimism (OP), and Base to scale its operations. These networks extend Ethereum’s capabilities by processing transactions off-chain and settling them back on the mainnet.
Although L-2 adoption has lowered user costs, it has also led to unintended consequences. Activity is shifting away from Ethereum’s mainnet, drawing both users and transaction fees toward L-2 ecosystems.
As one user on X noted, “Arbitrum and Optimism are raking in fees… while Ethereum’s base layer is turning into a ghost town.”
This trend is backed by data. Analysts like Geoff Kendrick at Standard Chartered argue that L2s, particularly high-volume ones like Coinbase’s Base, are siphoning off billions in transaction fees that would otherwise flow through Ethereum’s mainnet.
Kendrick estimates that Base alone has removed around $50 billion in value from Ethereum’s market cap by diverting economic activity. In turn, this reduces the amount of ETH being burned through gas fees, weakening its deflationary mechanics and the long-promoted narrative of ETH as “ultrasound money.”
After EIP-1559, Ethereum’s fee-burning mechanism was expected to counterbalance issuance. However, with activity now fragmented across dozens of rollups and sidechains, overall fee burns have dropped significantly.
ETH has once again become net inflationary, now at an annualized rate of 0.5%. Meanwhile, staking yields have fallen below 2.5%, making ETH less attractive when compared to stablecoin strategies offering returns of over 4.5% across DeFi platforms.
Even Ethereum’s upcoming upgrade, Pectra — designed to improve L2 efficiency by increasing blob capacity from three to six for data availability won’t do much.
Kendrick has stated that he does not expect Pectra to reverse the broader ETH/BTC decline, calling the upgrade insufficient to address Ethereum’s underlying structural issues.
At the same time, activity on Ethereum’s mainnet appears to be drying up. Bots, particularly address poisoning bots, are now dominating gas usage on top contracts. Fewer organic applications are deploying directly to the mainnet.
As one user put it, “ETH mainnet is becoming a graveyard.” While this may be an exaggeration, Ethereum’s core layer is losing its reputation as the primary destination for on-chain innovation.
Ethereum price prediction: Is the bottom in?
Several signals from market analysts point to a wide spectrum of possible outcomes, but the risks appear to be stacking up more quickly for ETH than the potential tailwinds.
On the macro front, Ethereum remains heavily tied to the broader risk asset environment. According to Bloomberg strategist Mike McGlone, “ETH remains closely correlated with risk assets,” meaning its performance is likely to reflect that of U.S. equities and high-beta sectors.
If stock markets decline further in 2025, particularly under the weight of high interest rates, persistent inflation, or weakening global growth, Ethereum could face intensified downward pressure.
McGlone warned that in a deteriorating macro environment, ETH may “potentially revisit the $1,000 level,” which would represent a drop of nearly 50 percent from current levels.
From a technical standpoint, the price structure is also showing signs of strain. Analyst Mags remarked that Ethereum has “one of the worst charts of all time,” pointing to repeated failures to break above the $4,000 resistance zone during this cycle.
After three attempts, ETH not only failed to reclaim its highs but also lost support at its mid-range level and fell below an upward-sloping trendline that had held since the previous market bottom.
This type of breakdown, combined with the lack of strong support below current levels, opens the possibility of a retest near the $1,060 range — a price last seen during the 2022 bear market. As Mags noted, “technically speaking, the bearish scenario looks more likely.”
However, a more optimistic perspective came from trader Michaël van de Poppe, who observed that Ethereum may be showing early signs of a potential “deviation.”
According to him, if ETH can cleanly break above the $2,100 to $2,150 zone, it could spark a sharp move up to $2,800, indicating renewed strength in the market.
He also highlighted a recent decline in the U.S. Dollar Index as a favorable macro signal, suggesting that a weaker dollar might help support a crypto rebound in Q2.
Still, these bullish scenarios depend on Ethereum reclaiming key technical levels and broader market sentiment turning more favorable. Until then, the downside risks remain more visible.
In the short term, Ethereum’s trajectory appears closely tied to macroeconomic cycles and Bitcoin’s positioning. A decisive move above $2,150 could mark the start of a recovery phase. Without that, however, technical and structural pressure is likely to persist.
Trade carefully and never invest more than you can afford to lose.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.