Ethereum (ETH) has underperformed since its shift to the proof-of-stake (PoS) consensus model two years ago. According to The Block, citing a report from CryptoQuant, Ethereum’s performance has been 44% lower than Bitcoin’s since the merge. CryptoQuant’s senior analyst, Julio Moreno, explained that Ethereum’s decline isn’t limited to Bitcoin comparisons; it has also lagged behind altcoins like Solana and BNB.

Moreno pointed out that Ethereum’s current price remains above the undervalued range, suggesting that the ETH/BTC ratio might need to drop by 50% before ETH enters this territory. Consequently, further price decreases are possible. The underperformance has been attributed to weakening network activity, reflecting reduced market confidence.

Ethereum is trading at $2,374.02 with a 24-hour trading volume of $13.03 billion. The cryptocurrency has dropped 3.99% in the past 24 hours, with a market cap of $285.63 billion. Ethereum’s circulating supply stands at 120.32 million ETH coins.

Derivatives Data Signals Cautious Sentiment

The Ethereum derivatives market reveals mixed sentiment. Trading volume decreased by 29.60% to $21.28 billion, while open interest slightly fell by 1.17% to $10.49 billion. This suggests a reduction in trading activity, reflecting a cautious approach among market participants. Additionally, options trading volume dropped by 22.27%, yet options open interest grew by 2.00%, indicating continued interest in maintaining positions.

Source: Coinglass

The long/short ratios highlight a bullish sentiment, particularly on Binance and OKX, where top traders show a strong long bias. However, the market faces heavy long-side pressure, with $15.24 million in liquidations recorded over the past 24 hours, primarily from long positions. Leading exchanges such as Binance, OKX, Bybit, and Bitfinex continue to see notable trading and liquidation activity.

BlackRock’s Ethereum ETF Shows Promise

Ethereum’s role as the foundation of the decentralized finance and smart contract ecosystem has faced headwinds recently. Despite this, BlackRock’s Ethereum ETF has managed to garner attention, surpassing the $1 billion mark in net inflows.

Moreover, Ethereum’s underperformance continues to underscore the impact of deteriorating network activity, which could signal further potential downturns. As traders navigate these turbulent conditions, Ethereum’s market outlook remains uncertain, with cautious sentiment prevailing amidst ongoing volatility.