$ETH The difference between Ethereum and Bitcoin has become very pronounced in recent days. ETH has risen more than eleven percent in the past seven days, reaching around $1,756, and the daily moving average shows a bullish alignment, something that cannot currently be said for Bitcoin.

What is really striking is that despite this strong rise, market sentiment remains almost evenly split. Although the price has risen eleven percent in a week, sentiment is still hesitant, which is an important detail. It is a known market fact that rallies greeted with skepticism tend to continue, while rallies that everyone believes in usually peak. Volume also tells an interesting story; volume expansion during declines indicates panic selling, and panic selling in an uptrend can actually be interpreted as a bullish signal, because strong hands are absorbing these sales while weak hands exit.
The fundamental contradiction here lies between short-term overbought conditions and medium-term bullish structure. The 15-minute RSI is at 70, this overbought territory, and there is bearish divergence on the 4-hour and daily MACD. So a correction is definitely possible. But the trend itself is clear, the 4-hour and daily moving averages are bullish, the ETH/BTC pair is rising, and ETF inflows have been consistently positive for the past two days. On July 2, a net inflow of $29.08 million was recorded, after $14.89 million the previous day, marking the first real recovery signal after nine days of outflows. BlackRock's ETHA alone attracted most of these inflows.
It is useful to consider different perspectives in the market. The momentum-focused approach suggests that a correction to the 4-hour MA20 is a buying opportunity because the trend is strong. The risk management-focused approach argues that the MACD divergence is a red flag and one should wait until this signal is clearer. Those looking at flow analysis emphasize that institutional money currently prefers Ethereum over Bitcoin, which is the main reason for the ETH/BTC rise. Those with a contrarian view see panic volume as an opportunity.
The inversion thinking exercise is also useful here. What if the divergence resolves to the downside and ETH drops to $1,700 or below? This is possible, but the trend structure suggests that such a decline would be a retracement, not a full reversal. What if this ETH dominance is an end-of-cycle signal, meaning money rotates from Bitcoin to Ethereum, and then to smaller companies, and ETH is closer to the peak? This is a possibility to watch; if the ETH/BTC pair stalls, it could be a warning sign.
The real danger right now is the complacency of trend followers. The trend is clear, but divergence continues to accumulate, and the end of a clear trend due to divergence accumulation usually results in a sharp purge. For those in long positions, placing a stop loss below $1,720, the 4-hour MA20 zone, and holding the position to take partial profits between $1,820 and $1,850 seems logical. For those waiting for a sideways move, an aggressive entry would involve placing a stop-loss below $1,700 and buying the correction into the $1,730-$1,750 range. A patient entry, on the other hand, means waiting for the MACD divergence to become clear, i.e., price reaches a new high and MACD confirms it.
For those tracking ETH through Gate, the real question is whether this is a sustained rotation driven by ETF inflows, or a short-term squeeze within a broader downtrend. Current data supports the rotation thesis: ETH outperforms Bitcoin, ETF flows are positive, and the moving average structure is bullish. Divergence is a warning, not a reversal signal.
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