Over the past few days, capital flows have started to shift from Bitcoin (BTC) towards Ethereum (ETH), marking a change in investor preferences. According to analysts, Ethereum derivatives markets are showing strong optimism, suggesting a short-term bullish momentum for the second-largest digital asset by market cap.
Ethereum gains traction in the market
Price Increase : Over the past 24 hours, Ethereum has risen 4.5% to $3,480, while Bitcoin has seen a 1.6% decline to $94,800.
Open interest at all-time highs : Open interest in Ethereum hit new highs over the weekend, accompanied by a rise in implied volatility and increased demand for call options, according to a report from Wintermute.
Derivatives boost Ethereum rally
Demand for call options : Options contracts with close expirations show a positive bias towards purchases. The December option spreads, with strike prices between $3,600 and $5,000, stand out as favorites among traders.
Rotation into altcoins : This optimism has also boosted ERC-20 tokens, such as the Pepe memecoin, which is up more than 54% in the past two weeks, according to Wintermute. Layer 2-based platforms have seen a surge in interest in these tokens, supported by Ethereum’s rally.
Bitcoin struggles to break $100,000
Psychological resistance : Despite massive inflows into Bitcoin ETFs, a “sell wall” at $100,000 has halted its advance, leaving room for investors to explore other opportunities.
Dominance on the decline : Bitcoin’s market dominance has fallen from 62% to 59% over the past week, reflecting a rotation towards Ethereum and other digital assets.
Short-term outlook
Ethereum bullishness : According to QCP Capital, Ethereum could continue to lead the market while Bitcoin remains sideways until December. President-elect Donald Trump’s pro-crypto policies, which will come into effect after his inauguration in January, could be a catalyst to revive interest in Bitcoin in the medium term.
Potential catalysts : Significant Bitcoin buying by institutional players like MicroStrategy could bring attention back to the asset, although analysts warn this would be temporary.
Conclusion
Ethereum is positioned as the most attractive asset in the short term, supported by strong performance in derivatives markets and renewed interest in altcoins.
As Bitcoin faces hurdles on its way to $100,000, Ethereum is leading the shift in focus in the market, marking a new chapter in the crypto ecosystem. The question now is whether this rotation is the start of a structural change or just a momentary pause in Bitcoin’s rally.
