- Ether overtook Bitcoin as the most traded cryptocurrency in the spot market, reaching 32% dominance.
- Ether experienced increased capital rotation toward the asset, partly at the expense of Bitcoin, suggesting that the market may be entering the later stages of the cycle.
- Liquidity on Ether markets has improved, with bids recently overtaking asks, suggesting firmer buy-side support.
While riding a price rollercoaster, Ether quietly dethroned Bitcoin as the most-traded cryptocurrency in the spot market, signaling a decisive transition in trader attention. Ether’s dominance in volume has also been increasing with each consecutive week, widening the difference with Bitcoin and other digital assets.
At the time of this writing, Ether’s share of total spot trading volume on major CEXs has been above 32%, its highest level since August 2017.
On some platforms, Ether’s dominance has been even more pronounced. At CEX.IO, for example, Ether currently accounts for more than 39% of all trading volume in a week, moving from 28% a month ago. Notably, the increase was largely driven by transactions under $3,000, with their share in spot volume recently jumping above 50%. This points to an uptick in retail engagement.
Short-Term Tailwind, Mid-Term Caution
Historically, sustained spikes in Ether’s spot volume dominance have often signaled short-term strength for Ethereum, though they can also precede broader market cool-offs in the mid-term. Over the past five years, Ether’s rising dominance has been closely linked with periods of increase in total crypto market cap, including 6 out of 7 major altcoin seasons.
With attention now shifting toward Ethereum, the market could be laying the groundwork for another short-term expansion. Considering a potential Fed rate cut in September and that altcoins have been typically outperforming Bitcoin following such decisions, Ethereum could maintain its volume dominance for a while. These insights align with conclusions shared in recent articles on TheHolyCoins.
Capital Rotation Turns Toward ETH
Heightened focus on Ethereum also triggered accelerated capital rotation into ETH. Throughout August, Ether’s net position change climbed by 23%, while Bitcoin’s dropped by about 43%. As a result, Ethereum has now overtaken Bitcoin in capital rotation, indicating that traders are reallocating funds toward ETH at Bitcoin’s expense as well.
While this sounds positive for Ether’s price, this is also a signal for a cautious mid-term outlook, as such a development may mark the later stages of the market cycle. In previous two cycles, Ethereum drew proportionally more capital inflows than Bitcoin in the final months of the bullish cycle. This means that the markets could be approaching a deeper correction phase.
Deeper Ether Liquidity With Bid-Side Strength
Ether saw an improved liquidity landscape on CEXs, which supports the view of potential price recovery in the short-term. For instance, aggregated 2% market depth across CEXs increased by 21% over the past three months. The 2% market depth measures the total value of buy and sell orders within 2% of an asset’s current price, showing how much liquidity is available close to the market.
Although this increase in liquidity has been primarily led by the ask side, the market has recently shifted toward bid dominance. A stronger bid-side cushion suggests firmer buy-side support, which may help absorb volatility and reduce downside risk.
In short, after the latest correction, Ether’s market setup now looks healthier. A follow-through demand will determine whether Ether can turn this liquidity advantage into sustained price strength.
Ether Faces the Largest Selling Pressure in 2025
Despite healthier liquidity conditions, Ether still faces significant selling pressure. Ether’s Net Taker Volume recently registered its lowest point since the post-election rally in late 2024. Net Taker Volume shows whether aggressive buyers or sellers dominate on exchanges, and negative values suggest more aggressive selling. At the same time, Ether’s short position reached a new all-time high on CME, putting additional pressure on the asset.
Such a combination could lead to two potential outcomes: either Ether faces a short-term correction due to selling pressure, or it could see a local short squeeze if bullish momentum stays intact. Either way, Ether appears to be poised for a significant directional move.
Conclusion
ETH’s dominance in spot volume, renewed relative strength vs. BTC, and positive capital rotation all support the bull case for Ether. However, parts of Ether’s market structure remain fragile, warning against complacency and signaling that a correction could still be around the corner.
In the very near term, consider watching for three validation signals:
- Net Taker Volume turning toward neutral/positive,
- Bid-side depth maintaining its lead without a sharp pullback,
- Futures short positioning cooling.
If these conditions hold, the path of least resistance leans to the upside; if not, a shakeout may precede the next leg higher or even push the asset into a deeper correction.