Ethereum Price Gap with Bitcoin Signals Potential Comeback

Despite ongoing struggles, Ethereum’s price gap with Bitcoin hints at a possible comeback, particularly with the historical strength of May. Analysts note that Ethereum is currently undervalued compared to Bitcoin, which could lead to a shift in momentum. The upcoming Pectra upgrade may further bolster ETH’s standing in the market amid Bitcoin’s dominance.

After a long spell of underwhelming performance, Ethereum (ETH) appears to be closing the gap with Bitcoin (BTC), sparking discussions about a potential comeback for the first time since 2019. Analysts believe that the current conditions might finally be ripe for a resurgence, especially as historical data points to May being a particularly strong month for Ethereum.

Recent data from Coinglass shows that since 2016, Ethereum tends to average a nearly 28% gain in the month of May. This year, observers are keeping a keen eye on ETH, hoping to witness a shift in current sentiments that have seen it trailing behind Bitcoin and other altcoins for the past five months.

A blockchain analytics firm, CryptoQuant, has highlighted Ethereum’s current state of undervaluation as a critical indicator. They assert that ETH is “extremely undervalued compared to BTC,” marking a notable first since 2019. Historically, such periods of undervaluation have often led to Ethereum outperforming Bitcoin in subsequent months, although analysts caution that certain factors like supply pressure and low demand could dampen any rebound potential.

The crypto landscape remains uncertain, with no unanimous agreement on Ethereum’s trajectory. Some market participants speculate that positive developments might have already prompted insider actions, suggesting that market movements could reflect anticipated price increases. However, over-the-counter transactions are still a potential wild card in this equation.

On a more optimistic note, the Ethereum Foundation is actively pursuing long-term enhancements through their upcoming Pectra upgrade. This initiative aims to bridge the gap between decentralized applications and traditional apps, making the user experience smoother and more intuitive.

As articulated by Artemiy Parshakov from P2P.org, the introduction of account abstraction in the Pectra update opens avenues that were previously unobtainable in the Ethereum ecosystem. This advancement is expected to help rejuvenate interest in ETH and potentially alter its market perception.

Tracy Jin, COO of MEXC, echoes this sentiment, viewing the Pectra upgrade as an opportune moment to improve the state of altcoins amid the current dominance of Bitcoin, which sits at a yearly high of 63.9%. With many altcoins struggling to maintain momentum after initial hype-driven surges, the Pectra upgrade may serve as a catalyst for a more favourable turning in the market’s overall mood.