NEWS

The cryptocurrency market has entered another volatile phase, with Bitcoin (BTC) dropping to its lowest level in nearly seven weeks while Ethereum (ETH) continues to attract investors’ attention. The contrasting performance between the two largest digital assets is sparking debate over whether the balance of power in the crypto market is beginning to change.

On Tuesday’s early Asian trading session, Bitcoin slipped 0.8% to around $108,719 before paring some losses later in the day. The drop pushed the world’s largest cryptocurrency below its 100-day moving average — a technical indicator often seen as a sign of weakness in the short term.

By contrast, Ethereum has recently emerged as the “hot pick” for crypto traders. Over the weekend, it touched a fresh record high at $4,955, before easing slightly. Despite the pullback, many investors remain confident that Ethereum’s long-term potential, fueled by its ongoing network upgrades, could drive prices higher in the months ahead.

A Clear Investment Shift Toward Ethereum

Recent fund flow data highlights a significant investor shift. In August, U.S.-listed Bitcoin exchange-traded funds (ETFs) recorded net outflows of more than $1 billion, while Ethereum-linked ETFs attracted strong inflows of $3.3 billion. This sharp divergence underscores investors’ growing preference for Ethereum as a diversification tool and a potential outperformer within the digital asset space.

Still, neither asset has escaped selling pressure. Both Bitcoin and Ethereum have faced double-digit losses in recent days, leaving traders cautious about further volatility.

Liquidations Add to the Pressure

According to Sean Dawson, Head of Research at Derive.xyz, the week started with “a bloodbath” for major cryptocurrencies. Crypto markets recorded over $900 million in liquidations, with Ethereum accounting for $324 million and Bitcoin for $209 million. Most of these liquidations were forced long positions, triggered by broad-based price corrections.

These large-scale liquidations highlight the heavy use of leverage across crypto derivatives markets and emphasize how fragile prices can be when speculative positioning becomes too aggressive.

Derivatives Data Signals Growing Caution

Derivatives indicators also point to rising caution among investors. Dawson explained that the 25-delta skew — a key metric showing whether traders are paying more for downside protection versus upside exposure — has flipped into negative territory for both Bitcoin and Ethereum.

This shift suggests that demand for put options (bearish bets) has outpaced demand for call options (bullish bets), signaling that traders are bracing for further downside risks. Market watchers now expect potential retests of the $100,000 level for Bitcoin and $4,000 for Ethereum in the near term.

Institutions vs. Retail: A Market in Transition

The recent correction reflects an ongoing tug-of-war between retail traders chasing quick gains via leverage and institutional investors taking longer-term positions. Some analysts argue that the pullback may actually be healthy for the market, allowing overextended positions to reset while creating opportunities for new inflows.

A research note by Point Trader Group emphasized that despite recent volatility, the crypto market retains strong long-term growth potential. The note cited rising institutional adoption, new investment products such as crypto ETFs, and continued technological upgrades across blockchain ecosystems as key drivers of the sector’s resilience.

Outlook: Can Ethereum Outperform Bitcoin?

The key question on investors’ minds is whether Ethereum can outpace Bitcoin in the medium term. Advocates highlight the upcoming Ethereum 2.0 transition, scalability improvements, and its dominance in decentralized finance (DeFi) and smart contracts as reasons for optimism.

Meanwhile, Bitcoin continues to be viewed as “digital gold” and the primary hedge asset within the cryptocurrency ecosystem. Its scarcity, liquidity, and institutional appeal ensure that it remains the cornerstone of the digital asset market.

Ultimately, the current downturn may not just be a temporary correction but part of a broader reshaping of the crypto landscape. With both Bitcoin and Ethereum at the center of market dynamics, investors should brace for heightened volatility — and potentially new opportunities — in the weeks ahead.