What’s Causing the Return of Bearish Sentiment on ETH?

Fear, uncertainty, and doubt (FUD) around Ethereum has surged again amid the apparent shift toward Solana, while the price of ETH in BTC terms has fallen to its lowest level in three and a half years.

The widening gap between Bitcoin and Ethereum comes as bearish sentiment toward the asset grows and as competing blockchains such as Solana rise.

SOL has gained about 17% over the past seven days, while ETH has largely stagnated, leading some observers to see this as a rotation out of ETH.

On October 24, it was reported that Solana’s price ratio to Ethereum had surged by about 600% since 2023, driven primarily by memecoin mania.

Solana’s rise against Ethereum has sparked discussion about its potential to reverse Ethereum’s market cap. Still, with Ethereum’s current market cap at over $300 million, according to Coingecko, and Solana’s at just $82 million, Ethereum still has a long way to go.

Meanwhile, the ETH/BTC ratio has fallen to its lowest level since April 2021, reaching 0.037 on Oct. 24, according to TradingView data, as Ethereum prices continue to retreat while Bitcoin prices recover.

Since hitting a two-month high of $2,760 on Monday, Oct. 21, ETH has fallen about 9%, dipping below $2,500 on Thursday. Meanwhile, Bitcoin has recovered nearly all of its losses from this week’s market pullback, hitting $68,820 in late trading on Oct. 24, according to Coingecko data.

ETH/BTC ratio. Source: TradingView

Ethereum developers and supporters have been defending the blockchain, with one core developer commenting on the blockchain’s alleged “flaws.”

On October 24, core developer Eric Connor refuted criticisms about Layer 2 user experience, liquidity fragmentation, and development speed in an X post, arguing that Ethereum is still the leading smart contract platform committed to true decentralization, with a large amount of institutional adoption and developer activity.

“I’ve always said Ethereum is a game that will take decades to develop, but it’s still on the right path to becoming a real winner.”

Meanwhile, independent trader Bob Loukas, who admits to being critical of Ethereum, said: “What we’re seeing is more of just a repricing of where the economic activity is and what people are using these [layer 2] chains for ‘today’” as value is distributed across the ecosystem.

Ethereum educator Anthony Sassano said much of the FUD appears to be related to ETH’s poor performance.

“It seems as though these complaints only exist when Ethereum is trading weakly relative to other assets — price drives sentiment,” he said in an Oct. 24 post.

Mert Mumtaz, founder of Solana developer tools company Helius, reiterated his support for the Ethereum ecosystem in a post on Oct. 25.