Bitcoin and Ethereum rotation accelerates: after risk appetite rebounds, can ETH see a rebound?

Recently, risk appetite in the crypto market has warmed up, and the rotation of funds between Bitcoin and Ethereum has accelerated significantly. Ethereum (ETH) failed to break through $3400 a few days ago and retreated to a stage low of $3045, then showed signs of stabilization. As of the time of writing, ETH is at $3118, with a slight rebound on the daily chart and a weekly increase of about 2.5%. Some funds are beginning to accumulate on dips during the pullback.

On-chain data shows that funds are shifting from Bitcoin to Ethereum. Since July, the inflow of funds into Bitcoin has dropped sharply from a high of about $62 billion to around $4 billion, reflecting a change in investor risk preference. Against this backdrop, Ethereum has become the main beneficiary, especially favored by whale funds.

According to Lookonchain monitoring, a whale has recently been continuously rotating between BTC and ETH. This address has accumulated a total of 1,969 Bitcoin (about $1.78 billion) exchanged for 58,149 Ethereum (about $1.81 billion). One transaction shows it directly exchanged 502.8 BTC for 14,500 ETH, worth approximately $45.24 million. Such behavior is generally seen as a bet on higher risk and higher potential returns, indicating increased market confidence in Ethereum’s medium-term prospects.

Demand-side improvements are also reflected in other indicators. The Ethereum fund market premium has turned positive for two consecutive days, the first time in nearly two weeks, indicating that institutional investors are willing to buy ETH at a premium. Meanwhile, exchange net inflow of ETH has been negative for five consecutive days, currently around -32,000 ETH, showing that the spot market is mainly withdrawing, with buyers still in the majority. Historical experience suggests that sustained outflows of funds often increase scarcity and support prices.

However, from a technical perspective, ETH still faces pressure. The Directional Movement Index (DMI) shows that bears still dominate. If the weakness continues, the price may fall below $3000 and test the $2800 region. Conversely, if buying interest continues to accumulate and push the price above the 20-day moving average (around $3121), ETH could further test the $3288 level near the 50-day moving average, signaling a potential trend reversal.