A subtle but significant shift in cryptocurrency market interest is underway, moving from Bitcoin to Ethereum. However, according to analysts, many investors are likely missing this transition due to lingering fears from past market downturns.
Michaël van de Poppe, founder of MN Trading Capital, highlighted this trend in a recent market update. He pointed out that the markets are no longer entirely focused on Bitcoin and are, in fact, shifting toward Ethereum. This observation aligns with insights from noted Bitcoin on-chain analyst Willy Woo, who suggested the crypto market is entering a phase dominated by Ethereum.
Investors Remain Trapped in a Bear Market Mindset
Van de Poppe agrees with Woo’s assessment but notes that the initial stages of this shift are going largely unnoticed. The reason? A pervasive mindset among investors that “the markets are bad.” This psychological barrier, often referred to as “bear market PTSD,” is preventing many from recognizing early positive signals.
“The first signs of that is that we are currently seeing that the returns of Ethereum are better.”
He attributes this emerging Ethereum trend to shifting macroeconomic conditions, including a weakening U.S. dollar and the beginning of an upward business cycle. These factors are creating a more favorable environment for Ethereum’s growth.
Data from CoinMarketCap shows that Ether has surged 71% since hitting its year-to-date low of $1,472 in April. Despite this impressive rebound, it remains 48% below its all-time high of $4,878, reached in November 2021. Van de Poppe emphasizes that while conditions are improving, the collective memory of the bear market continues to overshadow optimism.
The ETH/BTC ratio, a key metric watched by traders, has seen a modest increase of 0.33% over the past month. However, it is still down significantly by 32.32% over the last six months. This mixed performance indicates that while Ethereum is gaining ground, Bitcoin’s dominance persists. Analyst “Crypto Fella” described this ratio as the “most important chart to look at,” noting that strength in this area is necessary for a major trend reversal.
Another analyst, Ted, drew parallels between Ethereum’s current pattern and Bitcoin’s behavior during the 2017-2021 cycle. He suggested that a “parabolic move” for Ethereum could begin once it breaks the $4,000 resistance level.
Spot Ether ETFs Demonstrate Strong Momentum
A more immediately promising development comes from the spot Ether exchange-traded funds (ETFs). U.S.-based products recently achieved their longest inflow streak ever, recording 19 consecutive days of positive inflows. According to Farside data, these ETFs attracted $1.37 billion during this period, accounting for approximately 35% of total inflows since their launch in July 2024.
This sustained interest is a strong vote of confidence in Ethereum’s medium-term prospects. For those looking to understand the mechanisms behind these market movements, explore advanced analytical tools that provide deeper insights.
Despite these positive signs for Ethereum, other metrics confirm that Bitcoin still largely dominates the market. CoinMarketCap’s Altcoin Season Index, which measures whether altcoins are outperforming Bitcoin over a 90-day period, currently scores a mere 23 out of 100. This firmly indicates that the market is still in “Bitcoin Season.”
There was a brief hint of a change on May 10, when the index jumped to 43 following a sharp 42% rebound in Ether’s price. However, this proved temporary, and Bitcoin quickly reasserted its dominance.
The Path to Altcoin Season Relies on Ethereum’s Strength
The return of a broad “altcoin season”—a period where alternative cryptocurrencies significantly outperform Bitcoin—is highly anticipated by many investors. Van de Poppe argues that for this to happen, Ethereum must lead the way with stronger and more sustained performance.
“If we want to have an altseason that we all are craving for, well, we want to get out of our positions at breakeven or perhaps even make money, then we need Ethereum to do better, then we need Ethereum to show strength.”
He added that the markets are becoming increasingly complex, requiring more nuanced analysis and a closer watch on leading assets like Ethereum.
Recent market volatility underscored this complexity. Last week, Ether’s price plunged 15% to $2,440, causing the futures premium to briefly turn bearish and liquidating $277 million in leveraged long positions over two days. However, by the following Sunday, the futures premium had recovered to a neutral 5%, indicating that trader confidence in the $2,400 support level was being restored.
For investors navigating these shifts, understanding the interplay between major cryptocurrencies is crucial. Discover strategic insights to better position your portfolio in a changing market.
Frequently Asked Questions
What is causing the shift from Bitcoin to Ethereum?
Macroeconomic factors, including a weakening U.S. dollar and the start of a new business cycle, are making Ethereum more attractive. Additionally, Ethereum has shown better recent returns compared to Bitcoin, signaling a change in market dynamics.
Why aren’t more investors noticing this trend?
Many investors are still influenced by the psychological impact of the previous bear market, a phenomenon often called "bear market PTSD." This fear causes them to overlook early signs of recovery and emerging opportunities in assets like Ethereum.
What is the ETH/BTC ratio, and why is it important?
The ETH/BTC ratio measures the price of Ethereum relative to Bitcoin. It is a key indicator for understanding which asset is performing better. A rising ratio suggests Ethereum is gaining strength against Bitcoin, which could signal the start of an altcoin season.
How are spot Ether ETFs performing?
U.S. spot Ether ETFs have shown very strong momentum, recording 19 consecutive days of inflows totaling $1.37 billion. This represents about 35% of all inflows since their launch and indicates growing institutional confidence.
What needs to happen for an altcoin season to begin?
For a true altcoin season to occur, Ethereum needs to demonstrate sustained strength and significantly outperform Bitcoin. This would create a ripple effect, boosting confidence and capital flow into other alternative cryptocurrencies.
Is the market still dominated by Bitcoin?
Yes, most metrics, including the Altcoin Season Index, show that Bitcoin is still the dominant force. However, Ethereum is slowly gaining ground, and a breach of key resistance levels could change the current landscape.