Ethereum News Today: Ethereum Overtakes Bitcoin as Capital Rotates in Crypto's New Cycle

Ethereum (ETH) has surged to new all-time highs, reaching $4,946 on Sunday as traders and analysts observe a shift in momentum from Bitcoin (BTC) to the second-largest cryptocurrency by market capitalization. This surge follows a consolidation phase and has been supported by shrinking exchange reserves, increased treasury accumulation, and a regulatory environment that has become more favorable for Ethereum-based services.

On Coinbase, ETH broke above the $4,900 threshold at 5:40 p.m. UTC, surpassing its previous record of $4,867 set in November 2021 [1]. The move has been described as a "price discovery" event by analysts, where no historical resistance levels exist to hinder further gains. Traders are now observing the market’s psychological and order flow signals, which have traditionally guided price behavior in such scenarios.

The surge in Ethereum coincides with a period of relative exhaustion in Bitcoin, as highlighted by analyst Miles Deutsher, who noted that Bitcoin's recent rallies have stalled near key resistance levels while Ethereum continues to show strong follow-through buying [1]. This divergence in relative strength has led to a rotation of capital within the crypto market, with some investors shifting from BTC to ETH in pursuit of stronger returns.

One contributing factor to Ethereum’s price surge has been the declining supply on exchanges. As exchange-held balances diminish, liquidity tightens, and buyers must offer higher prices to incentivize sellers to withdraw their holdings from centralized platforms [1]. This dynamic has historically amplified price movements when momentum builds. Additionally, the recent launch of U.S. spot Ethereum ETFs has driven significant inflows, with over $1 billion in a single day reported in early August [2].

Ethereum’s treasury accumulation has also played a role in its price action. Publicly traded companies with Ethereum treasuries, such as BitMine Immersion and SharpLink Gaming, have amassed billions in ETH holdings, further tightening the supply available for trading and potentially boosting the cryptocurrency’s value [2]. Moreover, recent regulatory developments, such as clearer guidance from the SEC on staking services and the passage of the GENIUS Act, have provided additional support for Ethereum’s ecosystem.

Despite the optimism, analysts caution that the large weekly candlestick formation and the timing of the breakout—occurring on a weekend—may lead to a short-term pullback as liquidity normalizes early in the week [1]. Historically, weekend breakouts often retest key levels on the return to full market participation. A pullback to the $4,300–$4,900 range could serve as a confirmation test for the longer-term bullish trend.

Meanwhile, Bitcoin faces challenges related to its concentrated supply, with OG whales holding large portions of the total BTC supply at low cost bases [3]. Willy Woo noted that it now takes over $110,000 of new capital to absorb every Bitcoin sold by these early adopters. Recent movements by dormant whales, such as the transfer of $2.7 billion in BTC into ETH, have also contributed to volatility in both markets [3].

Looking ahead, several analysts have outlined potential price targets for Ethereum. If ETH retests and holds above $4,380, it could potentially push toward $4,800 and beyond [4]. Other targets include $5,376 over the next 6–8 weeks and a final cycle phase with a strong few months still ahead. However, traders are also advised to remain cautious, particularly around major macroeconomic events such as Federal Reserve Chair Jerome Powell’s upcoming speech at Jackson Hole [4].

As Ethereum continues its bullish momentum, the market will closely monitor both technical indicators and on-chain activity to gauge whether this price surge is a sustainable trend or a temporary spike. The broader crypto market appears to be aligning behind ETH as a leading force in the current cycle, with Bitcoin’s role shifting in real time.

Source:

[1] As ETH breaks above USD4,900, analyst sums up crypto market: BTC is exhausted, ETH isn’t (https://www.coindesk.com/markets/2025/08/24/as-eth-breaks-above-usd4-900-analyst-sums-up-crypto-market-btc-is-exhausted-eth-isn-t)

[2] Ethereum jumps to record price move (https://finance.yahoo.com/news/ethereum-jumps-record-price-move-184709473.html)

[3] Bitcoin OG whales to blame for BTC’s painful rise: Willy Woo (https://cointelegraph.com/news/bitcoin-flash-crash-blamed-crypto-whales-big-eth-trades)

[4] Why dormant Bitcoin whales are rotating into Ethereum (https://finance.yahoo.com/news/why-dormant-bitcoin-whales-rotating-233132720.html)