Ethereum’s performance has been lackluster compared to Bitcoin, especially in recent years. While it has historically outperformed in bull markets and halving years, the trend has reversed in 2024.

Key Concerns for Ethereum
– ETH/BTC Ratio: The ratio has plunged to a 3.5-year low, suggesting Ethereum’s significant underperformance compared to Bitcoin. Fractal analysis, while not foolproof, hints at a potential extended downtrend for Ethereum.
– Shifting Market Conditions: Similar periods with interest rate cuts (like 2019) have historically seen Ethereum drop against Bitcoin. This raises concerns for the upcoming potential Fed rate cuts in September 2024.
– Deflation to Inflation: The Ethereum Merge initially reduced supply, but the Dencun upgrade reversed this trend. Over 213,500 ETH have been added to circulation since then, raising inflationary concerns.
– Negative ETF Flows: Despite initial hopes, Ethereum ETFs have witnessed outflows totaling $465 million, potentially hindering price recovery.

Possible Reasons for Negative ETF Flows
1) Grayscale ETHE Outflows: Huge outflows from Grayscale’s ETHE overshadow positive inflows from other Ethereum ETFs.
2) AP Redemptions: Authorized Participants (APs) might be selling ETH to redeem ETF shares, contributing to the price decline.

Overall, Ethereum faces a challenging environment. Its underperformance compared to Bitcoin, inflationary trends, and negative ETF flows raise concerns for its future price performance.