The market has preferred Ethereum over Bitcoin in Q3, but the trend could face a test in Q4.
Technically speaking, the ETH/BTC ratio is set to finish the quarter more than 19% higher, the first ETH-driven outperformance since the third quarter of 2025. But the real question is whether Ethereum will be able to maintain its lead as the market enters the fourth quarter.
According to CoinGlass, the fourth quarter has traditionally been Bitcoins strongest quarter, with average gains of more than 77%. Ethereum, in comparison, has delivered an average Q4 ROI of around 18%.
This seasonal disparity could become a major headwind for ETH/BTC, especially after Ethereums strong Q3 rally.
Source: TradingView (ETH/BTC)
More importantly, the historical data shows another key pattern.
Bitcoin has outperformed Ethereum in 8 out of the last 9 Q4 cycles, with 2021 being the only exception. Besides, BTC has typically posted lower losses in bear markets.
This dynamic suggests that Bitcoin is consistently resilient in both bullish and bearish environments, gaining more ground during risk-on periods and posting lower losses during risk-off ones.
According to AMBCrypto, this scenario is even more relevant in the current macro setup. Q4 is expected to start with elevated volatility. If the risk appetite decreases, then Bitcoins historical pattern could give it an edge over Ethereum.
Ethereum supply shock builds ahead of Q4
Ethereum is entering Q4 with rising odds of breaking the historical performance pattern.
Ethereums supply setup is getting increasingly tight. According to Santiment data, only 6.06 million ETH is currently on exchanges, down from 22.9 million at the June 2020 peak.
This trend is accelerating, with around 140,000 ETH worth of around $350 million now leaving exchanges over the past 96 hours.
In addition, the staking ratio for Ethereum has reached a new all-time high, while Bitmine added 27,180 ETH last week. However, a larger indication of this is the developing divergence between ETH and BTC exchange supply.
As the chart below shows, only 12.7% of ETH supply is currently held on exchanges, compared with 16.5% for BTC, a nearly four-percentage-point difference.
Source: Glassnode
This divergence shows a clear shift in investor positioning.
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In a risk-off environment, that matters because lower exchange balances imply less ETH available for selling. So, even if volatility picks up in Q4, Ethereum could experience less sell-side pressure, providing it with a better setup for a rebound when demand returns.
In this regard, Ethereums [ETH] tightening supply could challenge its historical Q4 weakness. With renewed demand, lower exchange balances could give ETH a much-needed boost towards breaking its usual Q4 pattern against Bitcoin and becoming a better macro hedge.
Final Summary
- Bitcoin has historically performed better than Ethereum in Q4.
- Tighter ETH supply could help Ethereum rebound if demand returns.