Ethereum (ETH) Price Gap with Bitcoin Could Pave the Way for a Long-Awaited Rebound

After years of underperformance, Ethereum's price gap with Bitcoin could pave the way for a long-awaited rebound, analysts say.

May marks four years since Bitcoin (BTC) last outperformed the broader crypto market, a feat that could be repeated this year as the world’s leading cryptocurrency continues to display strength despite recent turbulence.

After a period of underperformance, analysts are closely watching for any signs that could indicate a shift in momentum, especially after Ethereum (ETH) experienced a 16% decline in April alone.

Historically, May has been kind to Ethereum, with the second-largest cryptocurrency delivering an average return of nearly 28% in May since 2016.

This year, however, Ethereum’s performance has been closely tied to its valuation gap with Bitcoin, which could be setting the stage for a long-awaited rebound, according to blockchain analytics firm CryptoQuant.

“ETH is now extremely undervalued compared to BTC, the first time since 2019. Historically, this led to Ethereum outperforming. However, supply pressure, weak demand, and flat activity could stall a rebound,” the firm said.

Chart: CryptoQuant

Some members of the crypto community believe that if anything positive were to happen, insiders would already be acting in anticipation and the market would likely see the price quickly increase. Over-the-counter deals are not completely ruled out yet.

While Ethereum is still facing short-term pressure, the Ethereum Foundation is focused on long-term improvements with the Pectra upgrade, which aims to make decentralized apps feel more like traditional applications.

As Artemiy Parshakov, vice president of institutions at staking infrastructure provider P2P.org, previously told crypto.news, account abstraction, introduced with the Pectra update, opens up possibilities “that were simply impossible before.”

Tracy Jin, COO of cryptocurrency exchange MEXC, also sees Pectra as a chance to shift the broader market mood.

With Bitcoin dominance now at 63.9%, nearly reaching the levels seen during the 2021 bull market, and most altcoins struggling to gain lasting traction beyond hype-driven spikes, Jin said the Pectra upgrade offers a “rare opportunity to flip the script in favour of altcoins.”