Ether Outshines Bitcoin as Regulatory Tailwinds Boost Crypto Market
In the opening of the trading week, Ethereum is experiencing a retreat after reaching a new peak over the weekend. The price of the second-largest cryptocurrency dropped by 6% to $4,548.32, as reported by Coin Metrics. On Sunday, it peaked at an unprecedented high of $4,954.81, surpassing its previous all-time high set on Friday since January 2021.
Concurrently, Bitcoin was trading over 1% lower at $111,501.74. Over the weekend, it dipped to $110,779.01, marking its lowest point since July 10. The leading cryptocurrency had recently attained a record of $124,496 on August 13.
The decrease in value for both coins follows the erasure of gains from Friday, when crypto assets witnessed a surge alongside the broader market due to hints of impending interest rate cuts by Federal Reserve Chair Jerome Powell and the return of risk-on investing. This resulted in forced liquidation of over $245 million in long Ethereum positions and approximately $175 million in long Bitcoin positions within the past 24 hours, according to CoinGlass.
Notably, Ethereum has been spearheading the crypto market for several weeks due to favorable regulatory conditions, growing interest in tokenization (including stablecoins), and substantial purchases by a new wave of corporate Ethereum accumulators such as Bitmine and SharpLink.
This shift in leadership has provided support for ETH, which has maintained the $4,000 level this month following multiple unsuccessful attempts to breach the resistance mark since 2021. Ben Kurland, CEO at crypto research platform DYOR, stated that “the buyers are finally bigger than the sellers.” He added that ETH ETFs are attracting consistent inflows, and public companies are viewing ETH as a yield-generating treasury asset.
Kurland also mentioned that nearly a third of the supply is locked in staking, scaling solutions have matured, and with interest rate cuts back on the table, the cost of capital is diminishing. These factors transformed the $4,000 level from a resistance point into a foundation for revaluing Ethereum’s next phase.
Ether ETFs recorded inflows totaling $341 million on Friday and two consecutive days of positive flows, according to SoSoValue, led by Fidelity’s FETH fund. Meanwhile, Bitcoin ETFs experienced their sixth straight day of net outflows — primarily from BlackRock’s popular IBIT fund, while others saw minor inflows.
For the week ending August 22, Ethereum recorded $237 million in net outflows, marking its first week of negative flows since May 9. Bitcoin ETFs experienced over $1 billion in net outflows during the same period.