• Ether's recent underperformance may be over, Steno Research said in a report.

• The report noted that in the last bull market, during altcoin season, ether more than doubled in value compared to bitcoin.

• The U.S. Federal Reserve's interest rate cut will result in more onchain activity, which will benefit Ethereum.

Ether's (ETH) recent bout of underperformance may be over and the world's second largest cryptocurrency could be ready to shine again, both in fiat terms and relative to bitcoin (BTC), Steno Research said in a report on Thursday.

The native token of the Ethereum blockchain has risen nearly 8% year-to-date, while bitcoin has surged 43% and the CoinDesk 20 index (CD20) has gained nearly 11%.

Ether's performance in the last bull market could provide some guidance. ETH surged during the last altcoin season, and in under two months it more than doubled in value compared to bitcoin, the report noted.

This shift was sparked by a surge in onchain activity, the report said, including decentralized finance (DeFi), stablecoin issuance, and the boom in non-fungible tokens (NFTs), all of which happened mainly on the Ethereum blockchain.

The Federal Reserve interest rate cut, earlier this week, will result in increased onchain activity, which will strongly benefit Ethereum, Steno said.

Bitcoin exchange-traded funds (ETFs) are unlikely to continue outperforming ether versions as much, Steno said, noting that ETH has shown its ability to suddenly outperform its larger rival in the past.