- Ethereum recently outperformed Bitcoin, triggering a rare ETH-BTC decoupling.
- The move reignites debate over Ethereum’s potential return as a “hedge” play.
Though fleeting, a sharp divergence on the 29th of May threw a curveball at the crypto crowd. Ethereum [ETH] surged 1.87% intraday, breaking out to a fresh three-month high at $2,791.
Meanwhile, Bitcoin [BTC] took a counter move, dipping 2.01%.
According to AMBCrypto, it underscored a rare ETH-BTC decoupling that’s turning heads on the order books: Could this subtle divergence be the spark that ignites Ethereum’s next power rally?
ETH gears up for takeoff as BTC hits a wall
Q2 has been nothing short of a flex for Ethereum. It has nearly doubled returns, leaving Bitcoin’s 30.2% gains eating dust, despite BTC notching fresh all-time highs.
Still, most of the liquidity has been BTC-bound, with ETH grinding sideways for weeks. But that script may be flipping. The ETH/BTC pair is perking up, printing a breakout structure that mirrors early May setup.
Over the last four sessions, the ratio has climbed close to 6%, while Bitcoin has dropped 5.05% on the week.
Ethereum, on the other hand, has only slipped 1.06%, showing notable relative strength. According to AMBCrypto, it is the kind of setup that often front-runs a rotation play.
Source: TradingView (ETH/BTC)
Case in point: Back in early May, ETH broke free from a sluggish range and ripped 50% higher in under a week, while Bitcoin chopped sideways near $103k.
As May comes to a close, Bitcoin is once again caught in a tight trading range, potentially setting the stage for Ethereum to capitalize on its relative strength.
Smart money gears up to back Ethereum’s rotation rally
Ethereum’s divergence from Bitcoin wasn’t a coincidence. Instead, it’s backed by some serious flow action.
On the 29th of May, while BTC ETFs hemorrhaged nearly $340 million in outflows, Ethereum ETFs raked in a solid $91.9 million.
Fidelity and Bitwise both saw fresh inflows, bucking the trend set by Bitcoin’s heavy BlackRock IBIT ETF-driven inflows.
Meanwhile, whales (holding 1,000+ ETH) are loading up fast over the past four days, perfectly syncing their moves with Bitcoin’s recent slump.
Source: Glassnode
On both the charts and the chain, Ethereum looks primed to capitalize on another rotation window, setting the stage for a potential mega rally against BTC’s volatility.
As Q2 wraps up, with ETH historically outpacing BTC by a wide margin, all eyes should stay locked on Ethereum, as it looks like it’s gearing up to deliver more alpha for savvy investors.
