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Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, has seen its dominance decline, as the ETH/BTC ratio hits a multi-year low of 0.022. This reflects a sharp dip in Ethereum’s relative performance to Bitcoin, signifying a decline in Ethereum’s dominance in the smart contract and layer 1 ecosystem. 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.
Ethereum’s total value locked currently stands at approximately $50.5 billion, a significant drop from its February 2024 peak of 61.64%. This suggests a gradual loss of share in the decentralized finance market, attributable in part to the rise of competitors such as Solana, which has grown from a 2.84% to a 7.24% share, bringing its total TVL to $6.69 billion.
One trend that has emerged is the difference in user behavior across networks. Ethereum continues to attract users involved in passive DeFi activities, such as yield farming and staking, while Solana’s ecosystem draws more speculative, active traders, particularly in meme tokens and high-frequency DeFi. This suggests that Ethereum’s existing use cases may not be aligned with current retail user trends.
Despite improvements in Ethereum’s historically high gas fees, Ethereum remains relatively expensive and slower to use than newer chains, particularly for users making smaller transactions. This has been reflected in a 9.8% drop in net total flows into ETH ETFs in March 2025, falling to $2.43 billion.
As Ethereum struggles, Bitcoin ETFs have attracted more than $36 billion in net inflows to date. Furthermore, bearish positioning in Ethereum has surged 40% in early February and has risen over 500% since November 2024, marking an unprecedented level of bearish positioning.
Ethereum’s overall market dominance has now dropped below 8.4%, its lowest level in over four years. 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.
Ethereum’s scalability issues have started to catch up. Despite multiple protocol upgrades, Ethereum’s mainnet still only processes between 10 to 62 transactions per second, compared to Solana’s 4,322 TPS. This has made newer users and applications choose to build elsewhere.
At the same time, activity on Ethereum’s mainnet appears to be drying up. Fewer organic applications are deploying directly to the mainnet, with bots, particularly address poisoning bots, now dominating gas usage on top contracts.
In terms of ETH price prediction, the risks appear to be stacking up more quickly for ETH than the potential tailwinds. Bloomberg strategist Mike McGlone has noted that ETH remains closely correlated with risk assets, meaning that if U.S. equities continue to decline, ETH could fall further, potentially revisiting the $1,000 level later this year.
However, trader Michaël van de Poppe has observed that Ethereum may show early signs of a potential “deviation”. 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.
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. As always, traders are advised to proceed with caution and never invest more than they can afford to lose.
