Ethereum [ETH] Dominates Bitcoin [BTC] in This Leg of the Market Cycle

The race to the top is heating up — and it's not another altcoin frenzy. Instead, it's a top-tier face-off between the two largest crypto assets.

The crypto market is currently witnessing an interesting narrative unfold, with an apex top-tier face-off.

As the narrative of an impending altcoin season brews, two cryptocurrency giants are engaging in a different kind of "frenzy." It's not an altcoin; rather, it's a top-tier face-off between the two largest crypto assets.

Ethereum (ETH) has been making a rapid recovery, adding nearly +50% to its recent lows. Clocking $2,616 at the time of writing, on the 11th of May, the world’s second-largest cryptocurrency is showing no signs of slowing down.

With a 7-day ROI of +14.58% and a 30-day ROI of +49.54%, the strength of the bulls at this stage is evident.

The Relative Strength Index (RSI) on the 4-hour chart is hovering at 56.87, indicating that the price momentum is still strong, but it might be approaching an overbought territory.

However, considering the recent bullish trends, the RSI could continue to rise.

As Ethereum experiences a rapid price surge and shows no signs of slowing down, Bitcoin (BTC) has stalled. Despite clocking new all-time highs (ATHs) recently, the flagship cryptocurrency is showing signs of weakness.

After a stellar performance in the first quarter, which saw Bitcoin’s price soar by over 70%, its price rally seems to have hit a pause. In the past month, Bitcoin has only managed to add 16.44% to its price.

The recent price action has seen Bitcoin experience a rejection from the $70,000 resistance. After tagging a high of $68,666 on the 12th of April, the price faced selling pressure, leading to a 6.46% price drop within the next 24 hours.

This move saw the price retest the $64,000 support level.

The capital gains narrative

With Bitcoin’s price movement relatively muted in recent times, investors are noticing a tactical tilt in the market as capital is rotating.

Recently, Ethereum experienced a breakout from the $1,800 level. As the price encountered resistance at the $2,597 mark, AMB Crypto highlighted a significant liquidity sweep.

Around 300,000 ETH were dumped on the market with strength at the time. However, the selling wasn’t a reversal; rather, it was a reset.

On the 8th of May, Bitcoin Dominance (BTC.D) peaked at 65.34% before decreasing. In the days that followed, the BTC.D dropped by 3%, while Ethereum Dominance (ETH.D) rose by 3%, reaching 9.75%. This signaled a clear divergence.

This shift in market dynamics can be attributed to a large-scale capital rotation. As investors noticed a lack of strength in BTC’s price and an inability to sustain the $68,000 level despite attempts to defend it, they began noticing the superior relative strength of Ethereum.

The investors are pivoting their capital accordingly to capture the asymmetric upside that Ethereum is offering.

At the beginning of May, investors had already begun noticing a change in the market trends. As Bitcoin encountered resistance at the $68,000-$70,000 band and experienced attempts to dump the price, a bulk of the liquidity was absorbed.

However, the selling pressure persisted, indicating that a market structure shift might be in the works.

With over a 60% ROI in just a few weeks of the investors’ capital being deployed, Ethereum is offering an interesting upside.

Therefore, it’s no surprise that investors are pivoting aggressively to capture this strength, especially as BTC is heating up.

Moreover, with Abraxas Capital recently reporting the addition of 242,652 ETH to their portfolio in the past week alone, for a total holding of 243,409 ETH valued at $560.8 million, and an average entry price of around $2,312, it seems that smart money is also joining the party.

This places them at an unrealized gain of more than $75.8 million, considering the current price of ETH is $2,597.

The last time Abraxas Capital reported a change in their cryptocurrency holdings was in December 2022, when they disclosed a reduction in their Bitcoin position by 1,600 BTC, taking their total BTC holdings to 162,066 at the time.

At the beginning of the year, Abraxas Capital also disclosed a new position in Litecoin (LTC), with