
Ethereum Stumbles as Bitcoin Soars: The Smart Money's Strategic Shift Revealed!
2025-05-19
Author: Ken Lee
In a dramatic twist in the crypto world, Ethereum (ETH) seems to be lagging behind Bitcoin (BTC), creating a striking divergence on the charts that has traders on high alert.
As Bitcoin celebrated back-to-back breakout candles, closing at an astonishing $107,111 on May 18th and 19th, Ethereum faced a stark reality. Despite the bullish Bitcoin rally, ETH struggled, failing to recover from a significant rejection at the $2,737 resistance on May 13th. Since then, Ethereum has dropped nearly 13% from its peak.
But this isn't just a random fluctuation; early warning signals are flashing!
Traditionally, savvy investors accumulate assets near local highs, triggering liquidity events by targeting stop-losses in a strategy known as "buying into fear." However, recent on-chain data shows a different pattern, indicating that large holders are offloading their Ethereum positions.
Reports from Lookonchain reveal that early dip buyers from May have started cashing in on their investments. One notable whale, for instance, purchased ETH at around $1,770 and sold near $2,440, raking in an impressive $3.18 million in profits.
This aggressive deleveraging has led to massive liquidations, with long positions accounting for nearly 78% of total wipeouts. Although funding rates are still leaning towards the long side, the increasing sell-side pressure suggests potential liquidity sweeps in the near future, raising concerns about further downside risks.
Ethereum's Relative Strength Takes a Hit
In the broader context, Ethereum has shown strong monthly gains compared to major assets, primarily due to its undervaluation against Bitcoin, catching the attention of smart money.
This price gap led to a significant rebound in the ETH/BTC ratio, reinforcing Ethereum's reputation as a prime rotational asset. Yet, a closer look at weekly charts reveals a troubling decline of nearly 11% in the ETH/BTC ratio, signaling a weakening relative strength as Bitcoin races towards new all-time highs.
The crucial takeaway? Smart money is keenly observing BTC's price movements.
As Bitcoin hovers around the $102K resistance zone, strategic dip-buying in Ethereum might provoke short-liquidation cascades and heightened liquidity sweeps. However, if Bitcoin maintains its bullish trajectory towards new peaks, Ethereum's performance could take a dive as investors consider reallocating their assets.
In the coming days, the ongoing market rotation will be pivotal. Should whales continue to reap profits and channel their funds into Bitcoin, Ethereum may find itself facing a broader capitulation phase, amplifying the risks of a downturn.