Bitcoin Looks Overextended As Ethereum Shows Early Signs Of Accumulation – Capital Shift?

Bitcoin is once again testing critical support levels after briefly losing the $100,000 mark on Tuesday, raising questions about whether the market is entering the late stages of the current cycle. Despite short-term weakness, Bitcoin continues to appear overheated, while Ethereum seems to be sending a different, more resilient signal.

The overall market tone has become increasingly complex. On one side, Bitcoin’s relentless rally over recent months has many traders believing the bull run is nearing its end. Across social media and trading communities, the sentiment is clear: “The bull run is almost over.” and “There won’t be another alt season.” This growing skepticism reflects widespread caution among investors who fear that BTC’s parabolic advance could soon lead to exhaustion.

However, beneath the surface, Ethereum’s quiet strength and on-chain activity hint at possible capital rotation or hidden accumulation — signaling that the cycle may not be entirely over. The divergence between the two largest cryptocurrencies highlights a shifting market structure, where traders must now navigate increased volatility, fading euphoria, and mixed technical signals.

Diverging Signals Between Bitcoin And Ethereum Fund Premiums

According to a CryptoQuant report by analyst Woominkyu, a subtle yet notable divergence has emerged between Bitcoin and Ethereum fund premiums — a dynamic that could reveal the next market rotation. The data shows that the Ethereum Fund Market Premium has been rising quietly, even as ETH’s price struggles around the $3,300 level. This indicates growing institutional interest in Ethereum despite its weaker spot performance.

In contrast, Bitcoin’s fund premium has remained flat, showing little change even after weeks of strong price movement. This behavior suggests that while BTC continues to dominate retail and media attention, institutional demand has not accelerated in tandem — a potential sign of market fatigue or strategic capital repositioning.

This divergence is not clearly bullish or bearish. It might represent early accumulation in Ethereum funds, signaling an upcoming rotation into altcoins, or simply temporary imbalances in demand between major crypto instruments.

What’s evident, however, is that market sentiment and institutional behavior are no longer aligned. Bitcoin’s momentum is driving the narrative, but Ethereum’s quiet accumulation under the surface could be the first hint of shifting capital flows — setting the stage for a more complex and potentially surprising next phase in the market cycle.

ETH/BTC Tests Multi-Year Support Amid Persistent Weakness

The ETH/BTC pair continues to display structural weakness, currently trading around 0.0327 BTC, after failing to maintain its brief recovery attempt toward 0.04 BTC. The weekly chart shows Ethereum struggling to regain strength against Bitcoin, suggesting that the capital rotation remains heavily tilted toward BTC dominance.

Since mid-2022, ETH/BTC has been in a persistent downtrend, forming lower highs and lower lows — a clear sign of relative underperformance. The pair’s latest rejection near the 100-week moving average further reinforces this bearish structure. For Ethereum to regain momentum, a sustained move above the 0.037–0.038 BTC zone would be crucial, as this region aligns with both technical resistance and previous breakdown levels.

However, there are early signs of potential stabilization. Volume patterns show accumulation near the 0.03 BTC zone, which coincides with the 2021 pre-bull run consolidation range — historically, a strong demand area.

If Bitcoin consolidates around $100K and market sentiment improves, Ethereum could stage a rebound in this pair, possibly signaling the beginning of a slow capital rotation back into altcoins. For now, though, BTC dominance remains firm, and ETH’s relative weakness underscores the cautious mood across the broader crypto market.

Featured image from ChatGPT, chart from TradingView.com