The cryptocurrency market is always changing rapidly. Not long ago, Bitcoin was firmly seated on the "top spot," but recently Ethereum has stolen the spotlight, performing a dramatic "ice and fire" act.
After Federal Reserve Chair Powell released dovish signals, the market did not rise as expected. Ethereum surged to a historic high of $4,888; meanwhile, Bitcoin lingered at the critical resistance level of $120,000, showing weakness. The stark contrast of strength and weakness is the result of the combined effects of fund flows, market narratives, whale activities, and technical psychology.
From the perspective of fund flows, the cryptocurrency iron law states, "Where the water flows, there it rises." Bitcoin ETFs have recently performed poorly, with a total net outflow of $23.2 million; even industry giant BlackRock's IBIT saw a daily net outflow of as much as $198.8 million, with funds continuously "bleeding out."
In contrast, Ethereum's ETF has seen a total net inflow of $337 million, with BlackRock's ETHA and Fidelity's FETH both attracting over $100 million. Clearly, market funds are not withdrawing from the cryptocurrency space but are "shifting positions" from Bitcoin to Ethereum, directly resulting in the differentiation of their market performances.
On the narrative level of the market, the allure of "storytelling" directly affects funding preferences. Ethereum holds multiple "good cards": the approval of a spot ETF provides a compliant entry channel, while new staking, DeFi innovations, and other ecological plays continuously emerge, offering investors a rich space for imagination.
Although Bitcoin has the value storage attribute of "digital gold," it lacks fresh narratives. Under the expectation of interest rate cuts, it is also difficult to attract incremental funds, leading investors to flock to the hotter Ethereum.
The operations of the whales have acted as a "barometer." Lookonchain data shows that a whale (or institution) holding 10,606 bitcoins with a profit of $1.12 billion actively sold 300 bitcoins to buy Ethereum and also realized a paper profit of over $100 million through ETH spot and high-leverage perpetual contracts, expressing confidence in Ethereum through actual actions. Additionally, an address that had been dormant for 3 years transferred 3,500 bitcoins (with a profit of 294%), suspected to be taking profits. These actions increased selling pressure on Bitcoin and further boosted Ethereum's rally.
Technical and psychological resistance also restricts Bitcoin. The $120,000 level is not only a technical resistance point but also creates psychological pressure for investors, akin to "a hurdle that cannot be crossed." Short-term traders, seeing no hope for Bitcoin to break through, have turned to Ethereum, which is trending stronger, creating a negative feedback loop of "the strong get stronger, the weak get weaker," making it increasingly difficult for Bitcoin to rise.
However, Bitcoin's "weakness" is relative; it is still at historical highs. Its being surpassed by Ethereum is essentially the result of multiple short-term factors resonating. The cryptocurrency world is always full of variables; if Bitcoin can launch a new narrative and break through key resistance, there is still a possibility of reclaiming the "top position." Regarding the current situation, do you think Bitcoin will continue to be sluggish, or can it make a comeback? Feel free to share your views in the comments section.
