
Ethereum Stalls as Bitcoin Soars: What's Behind the Smart Money Shuffle?
2025-05-19
Author: Ming
In a surprising turn of events, Ethereum (ETH) has failed to ride the coattails of Bitcoin’s explosive surge, resulting in a notable disconnect between the two cryptocurrencies.
As Bitcoin posted impressive gains on May 18th and 19th, closing at a staggering $107,111—its highest point since mid-January—Ethereum was on a different trajectory. After hitting a resistance at the $2,737 mark on May 13th, ETH has since fallen nearly 13%, demonstrating a clear divergence from Bitcoin's momentum.
Are Early Warning Signs Flashing?
Typically, savvy investors look to accumulate assets close to local peaks to capitalize on market dips, a strategy often referred to as 'buying into the fear.' However, current on-chain indicators suggest that the situation for Ethereum may be shifting toward riskier waters, with large holders beginning to offload their ETH positions.
Recent data from Lookonchain reveals that early buyers from May are now cashing in on substantial profits. For instance, one whale that acquired ETH around $1,770 has just sold off near $2,440, netting a breathtaking $3.18 million in realized gains.
The Impact of Deleveraging
This profit-taking has resulted in aggressive deleveraging, with long liquidations accounting for nearly 78% of total market wipeouts. While Funding Rates (FR) are still tilted toward long positions, rising sell-side pressure may trigger further liquidity sweeps, raising potential risks in the short term.
Ethereum's Relative Strength Takes a Hit
Despite its monthly performance outpacing other major assets due to a perceived undervaluation against Bitcoin, Ethereum's weekly charts paint a grim picture. The ETH/BTC ratio has dropped almost 11%, highlighting a weakening relative strength as Bitcoin pushes toward new all-time highs.
The crux of the matter is clear: the so-called smart money is actively recalibrating its strategies amid Bitcoin's ascension.
What's Next for the Market?
As Bitcoin hovers near the $102K resistance level, strategic dip-buying in Ethereum could lead to cascades of short liquidations and tight liquidity sweeps. However, if Bitcoin continues to gain traction towards new peaks, Ethereum's relative performance could further diminish as capital shifts away from ETH.
The next few days will be pivotal. With whales taking profits and reallocating funds to Bitcoin, the risk of broader capitulation for Ethereum increases, putting it on shaky ground in this volatile market.