Institutional funds are flowing into Bitcoin... Why is Ethereum lagging behind?

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Bitcoin (BTC) breaks through major resistance levels and gains strength, while Ethereum (ETH) fails to follow the same trend. Some analysts point out that this is not just a price difference, but a “selective return” of institutional funds causing a divergence between the two assets.

On the 13th, according to CryptoQuant data, analyst MorenoDV explained the very different trends of Bitcoin and Ethereum through the fund holding indicator. This indicator refers to the total amount held by institutional investment products such as ETFs, trusts, and dedicated funds, serving as a proxy for direct institutional demand. An increase in holdings is interpreted as institutional buying, while a decrease is seen as profit-taking or reduction.

Since early February this year, Bitcoin’s fund holdings have increased from approximately 1.28M BTC to 1.37 million BTC. Net purchases exceed 92k BTC, expanding institutional exposure by 7.2%. During the same period, Ethereum’s fund holdings decreased from 5.93 million ETH to 5.80 million ETH, a reduction of 127k ETH. The same market, the same institutional investors, but the directions are completely opposite.

The report suggests that this difference is not accidental. Bitcoin, with its deepest liquidity and mature ETF infrastructure, has established its position as a “reserve asset,” becoming a core holding for institutions. In contrast, Ethereum faces regulatory uncertainty and relatively complex valuation assessments, which have become burdens, with a repeated tendency to reduce positions during periods of instability.

Price trends also confirm this. After fund holdings of Bitcoin increased, its price quickly recovered from lows, while Ethereum’s rebound was weaker under the influence of outflows of institutional funds. Especially, the ETH/BTC ratio remains around 0.0285, unable to break free from the ongoing downtrend since mid-2022. Being trapped below the 50-week and 100-week moving averages also indicates a weak structure.

In the market, the 0.027~0.028 range is considered a short-term key level. If this zone is broken downward, it may retest the cycle low near 0.020. Conversely, for Ethereum to change its trend, it needs to reclaim the 0.035 level, but based on current structure, no clear signal has appeared. This trend again confirms that although institutional funds are flowing back into the crypto market, their starting point is Bitcoin.

Article summary by TokenPost.ai
🔎 Market interpretation
Institutional funds are concentrated in Bitcoin, and a “selective return” has emerged in the market. The demand for BTC confirmed by increasing fund holdings has driven a price rebound, while ETH remains relatively weak due to ongoing outflows. This is not just a simple price issue but a structural trend stemming from changes in institutional asset preferences.

💡 Strategy highlights
The current market can be interpreted as a “Bitcoin advantage zone.” Strategies centered on continuous institutional inflows into BTC are effective. For ETH, before confirming whether the ETH/BTC ratio rebounds and whether the 0.035 level is recovered, a conservative approach is needed. In the short term, the 0.027~0.028 support level is a critical threshold.

📘 Terminology clarification
Fund holdings: The total amount of tokens held by institutional products such as ETFs and trusts, a core indicator of institutional demand.
ETH/BTC ratio: A relative strength indicator showing Ethereum’s strength compared to Bitcoin.
Institutional fund return: The trend of large investors re-entering the market after uncertainty.
Reserve asset: The core asset used as a benchmark in the market (referring to BTC in cryptocurrencies).

💡 Frequently Asked Questions (FAQ)

Q. Why are institutional funds concentrated only in Bitcoin?
Bitcoin has the highest liquidity and market credibility, with well-developed institutional infrastructure such as ETFs. Therefore, during market uncertainty, institutions prioritize Bitcoin as a “benchmark asset” for investment.

Q. Why does Ethereum continue to perform weakly?
Due to regulatory uncertainty and complex valuation structures, Ethereum is viewed as a relatively higher-risk asset by institutions. As market volatility increases, they tend to reduce holdings first.

Q. How to use the ETH/BTC ratio in investment?
The ETH/BTC ratio shows the relative strength between the two assets. An increasing ratio indicates Ethereum is strengthening, while a decreasing ratio suggests Bitcoin is dominant. The current downtrend indicates the market is operating around BTC as the center.

TP AI notes:
This summary is generated using the language model based on TokenPost.ai. It may omit main content from the original text or differ from actual facts.