Ethereum had a very difficult day, largely underperforming Bitcoin
Ethereum, the second-largest cryptocurrency, has shed more than 11% over the past 24 hours, greatly underperforming Bitcoin.
The ETH/BTC pair fell 7.85% in a single day. It plunged to just 0.059 BTC, the lowest level since October 20.
Ethereum is down more than 22% against its main competitor since the start of the year due to risk-off sentiment taking central stage.
While altcoins tend to significantly outperform Bitcoin during bull markets, they typically face much larger corrections during bear markets as investors tend to flock to safer, more established assets.
Bitcoin dominance has now spiked 46%, thriving off of Ethereum’s big drop. As noted by trader Scott Melker, its chart has just invalidated the bearish divergence, which indicates that altcoins will likely continue to underperform.
That said, Bitcoin is far from a safe haven in such an environment. The biggest cryptocurrency is down 57.90% year-to-date.
Ethereum’s dismal price performance was partially caused by a seven-block deep reorganization that took place on the Ethereum Beacon Chain, which could merge with the main proof-of-work chain as early as this August, according to co-founder Vitalik Buterin. Developers attributed the event to a “non-trivial segmentation” rather than some sort of a fundamental flaw in the proof-of-stake chain. The Beacon Chain was launched in late December, introducing native staking.
The impending monthly options expiry, which is expected to take place this Friday, is also a key bearish catalyst as the bears look to secure a good payday.
