Bitcoin News Today: Ethereum Surges 44% Against Bitcoin Amid Institutional Demand

Ethereum has shown significant strength against Bitcoin since April, with a 44% rally from its early July lows, reaching $3,426 at the time of reporting. This performance has been driven by increased institutional demand and spot ETF inflows, which could further propel Ethereum's price. On the weekly chart, the ETH/BTC pair has broken through local resistance at 0.02629 and is challenging the 0.02968 level, indicating a potential uptrend.

Despite Ethereum's strong performance, it does not necessarily indicate weakness in Bitcoin. The ETH/BTC pair, which tracks Ethereum's value in terms of Bitcoin, has been in a severe downtrend since 2023 but has started to reverse in the past two months due to rising demand for Ethereum. Crypto analyst Matthew Hyland suggested that if ETH/BTC maintains its bullish bias, there is a 99% chance that Bitcoin Dominance (BTC.D) has topped. However, this does not mean that the Bitcoin rally is over. The BTC.D index has not yet broken out of its bullish trend and is currently at a higher low of 62.4%.

Analysts argue that the break in BTC.D will come once ETH/BTC continues higher, but these moves will take time and do not automatically mean that the Bitcoin rally has halted. It is possible that even after the ETH/BTC breakout, there will be periods of consolidation or pullback for Ethereum, during which Bitcoin could push higher. Therefore, while a topped BTC.D is good news for altcoin investors, it does not mean that Bitcoin holders should sell their holdings. The next few months could see significant gains across the crypto market, marking the final leg of the bull run after the halving in April 2024.

Bitcoin dominance, which measures Bitcoin's share of the total cryptocurrency market capitalization, has been a topic of interest among traders and analysts. Currently, Bitcoin dominance stands at 63.82%, up nearly 10% year-to-date. However, the past month has shown signs of weakening, with dominance falling 1.35% in 30 days and 1.85% over the past week. This shift is largely attributed to rising capital inflows into Ethereum and other altcoins. Ethereum's recent surge, with a nearly 20% increase over the last 7 days, has caused traders to question whether Bitcoin's long-standing dominance in the crypto market is now under threat.

Technical analysts are closely monitoring Ethereum’s price action. According to trader Cas Abbe, Ethereum is forming a clear bull flag, a chart pattern often followed by a breakout. If Ethereum breaks above key resistance levels and continues to outperform Bitcoin, it would reinforce the claim that Bitcoin dominance has peaked. Analyst Hyland stressed that it’s basically impossible for Bitcoin dominance to push higher if Ethereum continues higher against Bitcoin.

Despite the attention on Ethereum, many analysts remain optimistic about Bitcoin’s long-term trajectory. According to the analyst's forecast, there will be a period of short-term consolidation for Bitcoin after reaching a recent high. It is suggested that Bitcoin’s bull run is not yet over, but that altcoins — particularly Ethereum — may lead in the short term. Strong fundamentals, including increasing institutional demand and the potential for interest rate cuts in the U.S., continue to support Bitcoin.

Traditionally, when Bitcoin dominance falls, it signals growing interest in altcoins. Ethereum, often viewed as the leading altcoin, typically leads the charge during such phases. This pattern appears to be playing out now, as investor funds shift from Bitcoin into Ethereum and other alternative cryptocurrencies. Market watchers are pointing to Ethereum’s strength, rising DeFi usage, and the recent start of Ethereum ETFs in several jurisdictions as drivers of its renewed momentum. Crypto trader Ash Crypto echoed this sentiment, saying that the recent dip in Bitcoin dominance is due to money flowing into Ethereum and altcoins. With Ethereum gathering momentum and traders shifting focus to altcoins, Bitcoin dominance may have reached its peak — at least for now. If Ethereum continues its uptrend, the broader crypto market could see a rotation into altcoins, a hallmark of what’s often referred to as altcoin season.

Still, Bitcoin’s fundamentals remain intact, and many expect the top cryptocurrency to resume its climb later in the year. Until then, all eyes are on Ethereum as it tests the strength of Bitcoin’s hold on the market.