Ether (ETH<\/a>) price nosedived below $1,100 in the early hours of June 14 to prices not seen since January 2021. The downside move marks a 78% correction since the $4,870 all-time high on Nov. 10, 2021.<\/p>\n More importantly, Ether has underperformed Bitcoin (BTC<\/a>) by 33% between May 10 and June 14, 2022, and the last time a similar event happened was mid-2021.<\/p>\n Even though Bitcoin oscillated in a narrow range two weeks before the 0.082 ETH\/BTC peak, this period marked the \u201cDeFi Summer<\/a>\u201d\u00a0peak when the Ethereum network\u2019s total value locked (TVL) catapulted to $93 billion from $42 billion two months earlier.<\/p>\n Before jumping to conclusions, a broader set of data is needed to understand what led to the 31% correction in the ETH\/BTC price in 2021. Looking at the number of active addresses is a good place to start.<\/p>\n Data shows steady growth in active addresses, which increased from 595,620 in mid-March to 857,520 in mid-May. So, not only did the TVL growth take investors by surprise, but so did the number of users.<\/p>\n The 31% Ether underperformance versus Bitcoin back in June 2021 reflected a cool-off period after unprecedented growth in the Ethereum ecosystem. The consequence for Ether\u2019s price was devastating, and a 56% correction followed that DeFi Summer.<\/p>\n One must compare recent data to understand whether Ether is heading to a similar outcome. In that sense, those who waited for the 31% miss versus Bitcoin\u2019s price bought the altcoin at a cycle low near $1,800 on June 27, 2021, and the price increased 83% in 50 days.<\/p>\n This time, there is no DeFi Summer and before this year\u2019s 33% negative performance versus Bitcoin, the active address indicator was already slightly bearish.<\/p>\n By May 10, 2022, Ethereum had 563,160 active addresses, in the lower range from the past couple of months. This is the exact opposite of the mid-2021 movement that occurred as Ether price accelerated its losses in BTC terms.<\/p>\n One might still think that despite a relatively flat number of users, the Ethereum network had been growing by presenting a higher TVL.<\/p>\n Data shows that on May 10, 2022, the Ethereum network TVL held $87 billion in deposits, down from $102 billion a month prior. Therefore, there is no correlation between the mid-2021 cool-off after DeFi Summer and the current 33% Ether price downturn versus BTC.<\/p>\n These metrics show no evidence of similarity between the two periods, but $1,200 might as well be a cycle low, and this will depend on other factors apart from the network\u2019s use. <\/p>\n Considering how weak active addresses and TVL data were before the recent price correction, investors should be extra careful when trying to predict a market bottom.<\/p>\n The views and opinions expressed here are solely those of the <\/em>author<\/em><\/a> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<\/div>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/4f6dddde-ea71-469d-8ca3-1c92aef86e1d.png\")
What\u2019s behind Ether\u2019s 2021 underperformance?<\/h2>\n
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Is Ether flashing a buy signal right now?<\/h2>\n
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