Ether posts weekly gain against bitcoin amid drop in BTC market dominance

Ether's recent performance has seen the cryptocurrency outstrip bitcoin in terms of gains for two consecutive weeks — despite the latter's halving event .

There was a 7.5% increase in the ETH -5.30% /BTC trading pair during that timeframe, as noted by Monday's Bitfinex Alpha report. "This not only marks ether's strongest weekly gain against bitcoin since early January but also comes at a pivotal time amid swirling negative speculation around Ethereum," the Bitfinex report said.

Ether's regulatory challenges

The report highlighted ether's outperformance compared to bitcoin, despite the potential regulatory challenges the asset faces.

According to Consensys, the U.S. Securities and Exchange Commission (SEC) has decided that ether is a security and said the agency has "trained its sights" on the firm's Metamask software. The news adds to growing fears of a possible rejection or, at the very least, a delay in approvals for spot ether exchange-traded funds (ETFs).

Despite the regulatory headwinds, the Bitfinex report stated that ether's outperformance of bitcoin could act as a barometer for the broader altcoin market, suggesting the possibility of rallies or retracements. "It is highlighting a significant shift in investor sentiment and market dynamics," Bitfinex analysts added.

Bitcoin dominance declines

The report highlighted an historical pattern observed after bitcoin halvings, wherein attention typically shifts towards altcoins. "Altcoins tend to rally and gain market share after halvings," the report noted.

The analysts further emphasized that this shift towards altcoins is evident in the recent decline in bitcoin dominance, which they mentioned historically tends to occur immediately after halving events.

"Following last week’s halving, we saw bitcoin dominance reach 57% and then sharply decrease, as altcoins continue to gain traction," Bitfinex analysts added. According to data from Coingecko, bitcoin dominance is at 50.5% and ether dominance is at 15.9%.

Bitcoin trades at slight premium in Yen terms