Ethereum (ETH) showed strength over the weekend, fueling investor hopes for a breakout from its recent stagnation. However, its rally ultimately foreshadowed a broader market downturn.
In a subdued trading session due to the U.S. holiday, ETH climbed 7% to a session high of $2,850, outperforming the rest of the crypto market. But gains were short-lived as ETH retraced to $2,730, mirroring a broader decline that saw Bitcoin (BTC) dip from $97,000 to $95,500. Despite the pullback, ETH managed to hold onto a 2% gain over the past 24 hours, while BTC and the CoinDesk 20 Index fell by 2%.
A Familiar Pattern?
Traders pointed out previous instances—such as January and February—when a short-lived ETH rally preceded a larger market downturn. Earlier this year, ETH’s 10% surge to $3,400 quickly reversed, leading to a 35% collapse to $2,000, while BTC dropped 13% amid trade war concerns.
ETH’s recent movement coincided with turbulence in memecoins like Argentina’s LIBRA (on Solana) and BROCCOLI (on BNB Chain, inspired by former Binance CEO CZ’s dog).
“ETH’s recent price action isn’t an outperformance—it’s more of a catch-up to where it should be,” said Aran Hawker, CEO of CoinPanel. He noted that some traders rotated back into ETH from Solana (SOL), but no clear trend shift or structural change is evident yet.
A Turning Point Against Bitcoin?
Some analysts see signs of a potential long-term shift. Joel Kruger, a market strategist at LMAX Group, suggested ETH may finally be ending its multi-year downtrend against Bitcoin since 2021.
“There is evidence of ETH potentially wanting to finally put in a major bottom against BTC,” Kruger wrote in a market note. A break above the current monthly high in the ETH/BTC ratio could signal a reversal, he added.
Traders Bet on ETH’s Momentum
Investor interest in ETH surged on Monday, with open interest in ETH futures rising 12% to 9.27 million contracts ($2.6 billion) across major exchanges, led by Binance and Gate.io. In contrast, BTC futures only saw a 1% increase, suggesting traders are increasingly willing to bet on Ethereum’s near-term performance.
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