Why Is Ethereum Struggling to Replicate Last Cycle's Rally?

Despite on-chain data showing a vibrant Ethereum ecosystem—developer activity in Q4 2025 reaching record highs, over 9.1 million smart contracts deployed, NFT trading volume stabilizing at $12.6 million, and weekly DApp transaction volume surging 1135% to $180 billion—its price performance has moved in the opposite direction: a 45% decline within the quarter, and the ETH/BTC ratio continues to weaken, currently trailing Bitcoin by nearly 1.5 times.

The clear divergence between data and market prices reveals a key trend: market momentum is shifting from “spot accumulation” to “leverage-driven sentiment.” Although the ecosystem fundamentals are solid, the ETH/BTC ratio still declines by 0.28% weekly, indicating that capital has not rotated from Bitcoin to Ethereum as expected.

This disconnect often signifies that short-term speculative sentiment is overshadowing long-term value beliefs. Without sustained capital inflows and a structural shift in market confidence, even impressive ecosystem data makes it difficult for Ethereum to replicate the relative strength against Bitcoin seen in Q2 2025 based solely on fundamentals.

Perhaps, the true turning point requires not only on-chain prosperity but also a “dual shift” driven by both capital and conviction.