Ether Gains 2.5%, Outperforming BTC and Maybe Primed for More Upside

Ether has managed to break its recent streak of underperformance against Bitcoin, gaining 2.5% in the past 24 hours while Bitcoin has slightly declined. This uptick comes amidst a backdrop of significant liquidations, including $17 million worth of short bets against Ether, suggesting a possible shift in market sentiment. As the ETH/BTC ratio approaches levels not seen since April 2021, some traders speculate that this may mark the beginning of a resurgence for Ether, despite ongoing bearish sentiment due to its market share challenges.

Despite the skepticism that Ethereum is falling out of favor as layer-2 networks gain traction among DeFi traders, data indicates that Ether could be due for an upswing. The recent 2.5% rise in its price is noteworthy, particularly against Bitcoin's modest decline. However, the market still faces pressures, with bearish sentiment largely fueled by Ethereum's declining metrics such as new wallets and transaction volume, which have contributed to its lackluster performance over the past few months.

Many factors contribute to the prevailing negative sentiment around Ether, including the perception that layer-2 networks are siphoning off market share and activity from the Ethereum blockchain. With a market capitalization of $322 billion, Ether's recent trading range at $2,700 has shown firm resistance levels, making it difficult to regain upward momentum in the shadow of Bitcoin's recent surges. The concern remains about whether the latest rally signifies a true market reversal or simply a short-term response fueled by liquidations.

The significant liquidations of short bets on Ether, totaling $17 million, signify a shift in market dynamics, as traders reevaluate their bearish positions following the recent price increase. This potential short squeeze could catalyze further upward movement for Ether, but its historical struggles compared to Bitcoin raise questions about sustainability. As Ether seeks to recover from a downturn where it has consistently underperformed in relation to Bitcoin, the outlook remains uncertain yet cautiously optimistic.

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