The ETH/BTC Ratio and Its Implications
One ether bought about 2.3% more bitcoin on November 3 than it did on October 29, pushing the ETH/BTC ratio near 0.02954, its highest in CoinGecko’s seven-day snapshot. To reach 0.03 BTC, ether needed an additional 1.6% gain.
The interesting dynamic lies in how ether achieved this. On Monday, despite both assets trading lower in dollars, ETH gained against BTC. However, ONDO, a token often associated with ether's moves, fell more sharply, indicating a lack of relative strength.
Uncovering Strength in Bitcoin Prices
Monday’s Bitcoin news focused on its drop below $77,000. However, a look at the prices in bitcoin reveals a different narrative. Between November 1 and 2, Bitcoin's price fell from $78,248 to $76,677, a 2.0% decline. During the same period, ether slipped from $2,273 to $2,249, a 1.1% drop. Yet, an ETH holder ended Monday with slightly more bitcoin in terms of value, thanks to ether's relative strength.
Testing the "ETH Beta" Trade
ONDO, a token with governance rights in the Ondo DAO and Flux Finance, is often used as a proxy for ether's movements. On Monday, ONDO's price fell from $0.40431 to $0.38600, a 4.5% drop, while ether dropped only 1.1%. When priced in ETH, ONDO bought 3.5% less ether, highlighting the disconnect between its performance and ether's.
Key Ratios to Watch
As ether approaches 0.03 BTC, two ratios become crucial:
- ETH/BTC: A rise in this ratio would confirm ether's strength against bitcoin.
- ONDO/ETH: If this ratio rises alongside ETH/BTC, it suggests a stronger performance from ether, reinforcing the "ETH beta" trade.
Bitcoin, with its dollar-based pricing, provides a unique perspective, revealing gains that might be obscured in dollar terms.