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The Bitcoin-to-Ethereum ratio, a key indicator of market sentiment and relative strength between the two leading cryptocurrencies, has flashed a warning signal that could have significant implications for the crypto market's direction.

A ratio that compares the price of Bitcoin, the largest digital asset, with Ethereum, the second-ranked, hints at a potential waning of risk appetite in alternative cryptocurrencies.

The Bitcoin-to-Ethereum ratio suggests which of the two cryptocurrencies is gaining or losing ground versus the other. A rising ratio shows that Bitcoin outperforms Ethereum, while a falling ratio suggests the opposite.

The BTC/ETH ratio reached 20.76 in today's trading session, its highest level since April 2021. This trend implies a stronger demand for Bitcoin, the oldest and most established cryptocurrency, than Ethereum.

According to Bloomberg, citing QCP Capital analysts, this trend might be a very early warning of FOMO — fear of missing out — turning into "fear" if Ethereum is used as a proxy for sentiment toward smaller tokens or alternative cryptocurrencies.

A key factor contributing to Bitcoin's dominance might be the growing institutional interest in the cryptocurrency. Bitcoin hit a new high of $73,798 in mid-March, riding a wave of inflows into dedicated U.S. exchange-traded funds that debuted in January.

Bitcoin has retreated by around 9.33% from its ATH as ETF demand has cooled, and alternative cryptocurrencies have also declined. The ETF-led Bitcoin boom has slowed over the last three weeks, owing in part to economic indications pointing to higher-than-expected interest rates.

At the time of writing, BTC had dropped 0.37% in the previous 24 hours, reaching $66,563. Ethereum, the second largest cryptocurrency by market value, lost more than Bitcoin in the last 24 hours, falling 3.06% to $3247.

Most alternative cryptocurrencies, or altcoins, suffered even worse losses than Bitcoin and Ethereum.