Ethereum Trails Bitcoin by 35% Over 12 Months as the ETH/BTC Ratio Tests Support
Ethereum (ETH) has declined approximately 35% against Bitcoin (BTC) over the 12 months to May 11, according to market data circulating among analysts in recent weeks. The ETH/BTC ratio, a measure of how much Bitcoin one Ether can purchase, has been rejected below a long-term descending trendline, a chart structure that analysts say could extend losses by a further 40% if current conditions persist.
The move reflects a broad structural shift in how institutional capital allocates across cryptocurrency assets.
The ETH/BTC Ratio Explained
The ETH/BTC ratio is one of the most closely watched relative performance metrics in the cryptocurrency market. When the ratio rises, Ether is outperforming Bitcoin.
When it falls, Bitcoin is absorbing a larger share of new capital. A declining ETH/BTC ratio does not necessarily mean Ether’s price in dollar terms is falling.
It means Bitcoin is rising faster, or falling more slowly, than Ether.
Traders use the ratio to gauge risk appetite within the crypto market. Bitcoin tends to attract more conservative capital, particularly from institutional buyers using spot ETFs as their entry vehicle.
Ether draws more exposure from DeFi participants, developers, and protocol treasuries. A sustained ETH/BTC decline often signals that generalist institutional capital is dominating inflows while the more active DeFi community is less engaged.
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Background
Ethereum’s relative underperformance against Bitcoin has roots in two structural developments that accelerated through 2024 and 2025.
First, the approval and rapid growth of spot Bitcoin ETFs in the United States redirected a large volume of institutional demand toward Bitcoin specifically, without creating equivalent demand for Ether. Second, the rise of Ethereum Layer-2 networks reduced on-chain activity on Ethereum’s base layer, compressing the fee revenue that had previously made ETH a yield-generating asset for stakers.
Layer-2 networks are secondary blockchains that process transactions off Ethereum’s main chain and settle the results back to the base layer in batches.
They reduce costs for users but also reduce the amount of ETH burned as transaction fees on the base chain. Lower fee burns mean less ETH is removed from circulation, reducing the deflationary pressure that had supported ETH’s price thesis since the 2022 Merge upgrade.
The Ethereum Foundation acknowledged this dynamic in public commentary through early 2026, but has not proposed a structural fee policy change.
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What the Analyst Consensus Says
Analysts cited in market data sources point to the rejection of the ETH/BTC ratio below a multi-year descending trendline as a technically significant event. The ratio is currently retracing a pattern that played out between 2024 and 2025, when Ether lost ground steadily before a brief recovery that failed to break the trendline with conviction.
The bear case for a further 40% decline in the ratio would not require Ether to fall in absolute dollar terms.
It would require Bitcoin to continue outperforming, driven by spot ETF inflows and its status as the preferred macro hedge within the cryptocurrency asset class. The bull case rests on a recovery in DeFi activity, a successful expansion of Ethereum’s staking yield narrative, and a potential ETH spot ETF inflow cycle similar to the one Bitcoin experienced in late 2024.
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What to Watch
The ETH/BTC ratio level to monitor in May and June 2026 is the zone that previously served as support in late 2023.
A close below that level on a weekly basis would likely confirm the bearish trendline rejection and open a path toward the 40% decline scenario analysts have flagged. Ethereum developers are working on several upgrades targeting base-layer fee activity, and any successful deployment that reverses the burn-rate decline could change the picture materially.
Institutional demand for an Ether spot ETF in the United States is a second catalyst worth tracking. Spot ETF approval for ETH would replicate the Bitcoin dynamic and could compress the ETH/BTC ratio’s decline, or reverse it entirely.
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