The ratio between Ether (ETH) and Bitcoin's (BTC) dollar-denominated prices has spiraled downward, marking its lowest point since April 2021. This downturn, reflective of year-to-date losses, aligns with the emergence of a bearish death cross pattern observed a month ago.

On the crypto exchange Binance, the ETH/BTC ratio reached 0.04563, as reported by charting platform TradingView. This represents a nearly 16% decline in the ratio since the beginning of the year, signaling a prevailing preference for Bitcoin or the dominant cryptocurrency by market value.

The downward trajectory to three-year lows coincides with dwindling demand for exchange-traded products (ETPs) linked to Ether. Bloomberg data, cited by ETC Group in its weekly report, reveals net outflows of approximately $63.5 million from global Ether ETPs last week, with Hong Kong-listed exchange-traded funds (ETFs) experiencing the most significant losses. In contrast, Bitcoin ETPs saw inflows of $92.5 million during the same period.

Several factors contribute to Ether's waning appeal among investors, including intensifying competition from alternative layer 1 blockchains and lingering uncertainties surrounding the approval of spot Ethereum ETFs in the United States. David Han, an analyst at Coinbase Institutional's Research, notes that Ethereum's position as the premier network for decentralized app (dApp) deployment faces challenges from competing layer-1 platforms like Solana, whose market share in decentralized exchange volumes has surged tenfold in a year, eating into Ethereum's dominance.

While the U.S. Securities and Exchange Commission (SEC) greenlit numerous spot Bitcoin ETFs earlier this year, providing a substantial influx of capital into the crypto market, the approval of similar products tied to Ether remains pending. Traders on decentralized betting platform Polymarket express skepticism, assigning just a 10% probability of the SEC approving a spot ETF for Ether by the end of May.

Additionally, negative sentiment surrounding Ether persists, fueled by external players and rival blockchain communities, such as Solana and Bitcoin proponents. Ilan Solot, co-head of digital assets at Marex Solutions, highlights Ether's susceptibility to fragmentation of capital due to the proliferation of Layer 2 tokens and native protocol tokens across various ecosystems. Moreover, recent changes in Ether's supply dynamics, transitioning from a deflationary to an inflationary trajectory, have further dampened investor sentiment.

In sum, Ether finds itself mired in a confluence of negative factors, ranging from heightened competition to regulatory uncertainty and shifting supply dynamics. As external pressures mount and alternative investment opportunities emerge, the road ahead for Ether remains fraught with challenges, necessitating a cautious approach from investors navigating the volatile cryptocurrency landscape.