Ethereum’s price experienced a sharp pullback early in the week after hitting a record high over the weekend, with broader crypto markets reacting to a bearish Bitcoin performance. The second-largest cryptocurrency surged past $4,900 for the first time in history, reaching a peak of $4,946.90 before retreating to $4,431.60 by the end of the week. The decline marked a reversal from the previous weekend’s bullish momentum, where Ethereum broke above its 2021 all-time high in a classic breakout pattern. Analysts attributed the move to a shift in leadership within the crypto space, with Bitcoin’s price showing signs of exhaustion compared to Ethereum’s sustained demand and stronger relative strength.
The surge in Ethereum’s price was partly fueled by declining exchange reserves, reducing the amount of ETH available for selling. According to on-chain analysts, this scarcity can amplify price movements once momentum builds, as buyers must bid higher to acquire coins from off-exchange wallets. Meanwhile, large institutional investors, or “whales,” have been rotating capital from Bitcoin into Ethereum, reflecting confidence in the altcoin’s long-term potential. One notable whale, worth over $11 billion, closed a $450 million ETH perpetual long position and added $108 million in spot Ethereum holdings, according to blockchain intelligence firm Lookonchain. These whale movements are often viewed as a barometer for short-term market sentiment.
Bitcoin, on the other hand, faced a correction after hitting a record high of $124,496 on August 13. The flagship cryptocurrency dipped to $110,531 by the end of the week, marking a 2% decline and its lowest level since July. The pullback followed a broader market shift triggered by Fed Chair Jerome Powell’s dovish remarks at the Jackson Hole Economic Symposium, which initially boosted risk-on sentiment but later led to forced selling of large long positions in both ETH and BTC. The bearish pressure on Bitcoin allowed Ethereum to take a leadership role, supported by growing institutional adoption, including corporate treasury allocations and increased staking activity.
Ethereum ETFs have also seen a surge in demand, with $341 million in inflows recorded on Friday alone, primarily driven by Fidelity’s FETH fund. In contrast, Bitcoin ETFs, including BlackRock’s IBIT, saw their sixth consecutive day of net outflows. Analysts suggest that Ethereum’s ecosystem growth, including advancements in tokenization and a large portion of supply locked in staking, is creating a more sustainable foundation for price appreciation. Ben Kurland, CEO of DYOR, noted that Ethereum has transitioned from a resistance zone at $4,000 to a support level, indicating a potential re-pricing of the asset.
Looking ahead, some analysts caution that the sharp weekly breakout in Ethereum could lead to short-term volatility as liquidity returns to the market. The unusually large weekend price movement may retrace in the early days of the…
Read More: Ethereum Surges as Bitcoin’s Momentum Wanes
