Ethereum outperformed Bitcoin in the third quarter, with the ETH/BTC ratio closing more than 19% higher, marking its strongest quarterly showing since Q3 2025. However, historical data indicates a potential reversal, as Bitcoin has beaten Ethereum in 8 of the last 9 fourth-quarter cycles, with average Q4 gains of 77% versus Ethereum’s 18%.
The cryptocurrency market witnessed a significant shift in the third quarter, as Ethereum [ETH] outperformed Bitcoin [BTC], with the ETH/BTC ratio finishing the period more than 19% higher. This marks the first instance of Ethereum-driven outperformance since the third quarter of 2025, setting the stage for a potentially pivotal fourth quarter.
Historical data from CoinGlass, however, suggests a challenging environment for Ethereum in the coming months. The fourth quarter has traditionally been Bitcoin’s strongest period, with average gains exceeding 77%, while Ethereum has delivered a significantly lower average Q4 return of around 18%. This seasonal disparity could create a major headwind for the ETH/BTC pair, particularly after Ethereum’s robust Q3 rally.
The pattern is well-established, as Bitcoin has outperformed Ethereum in 8 out of the last 9 Q4 cycles, with 2021 serving as the only exception. Furthermore, BTC has typically posted lower losses in bear markets, demonstrating consistent resilience in both bullish and bearish environments by gaining more ground during risk-on periods and losing less during risk-off ones.
This dynamic becomes even more relevant given the current macroeconomic setup, as Q4 is expected to commence with elevated volatility. Should risk appetite decrease, Bitcoin’s historical pattern could give it a distinct edge over Ethereum in the eyes of investors seeking relative stability.
Despite the historical headwinds, Ethereum is entering Q4 with a fundamentally different supply dynamic that could challenge its typical fourth-quarter weakness. According to Santiment data, only 6.06 million ETH is currently held on exchanges, a sharp decline from the 22.9 million recorded at the June 2020 peak. This trend is accelerating, with approximately 140,000 ETH, worth around $350 million, having left exchanges over the past 96 hours.
The supply tightening is further evidenced by Ethereum’s staking ratio, which has reached a new all-time high. Additionally, Bitmine added 27,180 ETH last week, contributing to a developing divergence between ETH and BTC exchange supply. Currently, only 12.7% of ETH supply is held on exchanges, compared with 16.5% for BTC, a nearly four-percentage-point difference that shows a clear shift in investor positioning.
In a risk-off environment, lower exchange balances imply less ETH available for selling, which could reduce sell-side pressure even if volatility picks up in Q4. This tighter supply could provide Ethereum with a better setup for a rebound when demand returns, potentially giving it the boost needed to break its historical Q4 pattern and become a better macro hedge.
