Ethereum Outshines Bitcoin Amid Market Rotation as Bitcoin Faces Resistance at $100K

After a prolonged period of underperformance compared to Bitcoin, Ethereum’s ether (ETH) is experiencing a resurgence. In the past 24 hours, Ethereum gained over 4%, while Bitcoin saw a slight decline of 1.5%, dipping below the $95,000 threshold. This shift in momentum is attributed to traders rotating capital from Bitcoin to smaller cryptocurrencies, following the pause in Bitcoin’s meteoric rally that was fueled by Donald Trump’s election victory.

As the ETH/BTC ratio hit its lowest level since March 2021 last week, it has since rebounded by 15%, signaling renewed interest in Ethereum. The market now expects Bitcoin to remain sideways in the short term, while attention is turning toward Ethereum. According to a note from digital asset hedge fund QCP, the options market is reflecting this shift, with a heavy skew toward Ethereum call options.

Traders, including crypto hedge funds and family offices, have increasingly rotated from Bitcoin into Ethereum, and U.S.-listed ETH exchange-traded funds (ETFs) saw their first net inflows in several days. Notably, BlackRock’s ETHA product received a significant $99 million allocation on Friday, after a series of outflows.

Pentoshi, a well-known crypto trader, pointed out that Ethereum’s recent price action suggests the potential for a trend reversal, as the ETH/BTC ratio tested a key support level and rebounded. This points to further potential gains for Ethereum in the coming weeks.

Meanwhile, Bitcoin is encountering resistance at the $100,000 level, with a large sell wall hindering further upward movement. Paul Howard from Wincent suggests that Bitcoin will likely trade sideways until the end of the year, as investors digest the rally. He advises a market-neutral stance, adding that hedging with downside protection is a prudent risk-reward strategy at these levels.

In conclusion, while Bitcoin remains stalled at $100,000, Ethereum is experiencing renewed momentum, with the potential for continued outperformance as investors shift focus.