Crypto traders watch the ETH/BTC ratio as a gauge of risk appetite within the crypto ecosystem. When the ratio rises, altcoins (Ethereum, Solana, others) are outperforming Bitcoin — typically bullish conditions. When it falls, Bitcoin is outperforming — typically risk-off conditions where money flees to the largest-cap asset.
Historical ranges: 0.03-0.08 in the 2021 bull market, 0.05-0.07 in 2024-2026 stabilization. Sustained moves below 0.03 signal extreme Bitcoin dominance; above 0.08 signal altcoin mania.
For allocation decisions: if you hold both, rebalancing when the ratio reaches extremes historically has worked better than buy-and-hold. But crypto is volatile — this is observational, not predictive.