Ethereum (ETH) continues to show strength while Bitcoin cools down. Notably, BTC price reached $124,000 but recorded negative monthly returns, while ETH maintained a +16% increase, testing resistance and attracting capital flows. This has pushed ETH's dominance rate (ETH.D) from 8% to 14% since May, while Bitcoin's dominance rate (BTC.D) decreased from 60% to 59%.
On-chain data and product capital flows also reinforce this trend. Ethereum ETF funds contributed $2.9 billion out of a total of $3.75 billion in capital flows into cryptocurrency ETPs last week, bringing ETH price close to $4,700. Meanwhile, BTC only attracted $552 million, despite just hitting an all-time high.
Not only that, the Ethereum spot ETF has “exploded”, reaching a trading volume of $17 billion in just one week, out of a total of $40 billion in ETF trading for both BTC and ETH – indicating a large liquidity flow is strongly shifting towards Ethereum.
Simply put, the market is showing that ETH is currently the “capital magnet”, as both the ETF and the spot capital flows reinforce the dominance story.
Therefore, it can be said that the 4% correction in the past week is just a “shaking the tree to scare the monkeys” phase in the larger capital rotation picture into Ethereum.
Ethereum takes the lead
Since May, ETH has increased by over 100%, while BTC has only been around +20%, indicating Ethereum's capital dominance on a macro scale. Now, speculative capital is also pouring in.
In just the first two weeks of the month, ETH has attracted nearly $10 billion in leveraged capital, with open interest (OI) reaching a record $65 billion, while BTC only added about $1 billion – almost negligible.
This means that derivative liquidity is also strongly shifting towards ETH, not just spot capital. As a result, the ETH/BTC ratio is recording two consecutive months of green for the first time since 2022, with an increase of over 70% since May.
Why is this important?
In a risk-on market environment, it is clear that capital is flowing into ETH. Both spot capital and leveraged capital are focused on ETH, while BTC is left behind in weekly and monthly returns.
Thus, the recent 4% drop in ETH can be seen as a shakeout rather than a trend reversal, opening up the possibility of becoming an ideal entry point for the rally in 2025.