- Ether overtook Bitcoin as the most traded cryptocurrency in the spot market, reaching a 32% dominance.
- Ether has seen increased capital rotation into the asset, partly at the expense of Bitcoin, suggesting the market may be entering the latter stages of the cycle.
- Liquidity in the Ether markets has improved, with bids recently outpacing asks, suggesting stronger buying support.
While we are on a rollercoaster of prices, Ether quietly dethroned Bitcoin as the most traded cryptocurrency in the spot marketindicating a decisive transition in the attention of merchants. Ether’s dominance in volume has also increased each consecutive week, widening the gap with Bitcoin and other digital assets.
At the time of 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. On CEX.IO, for example, Ether currently accounts for more than 39% of all trading volume in a week, compared to 28% a month ago. Notably, the increase was largely driven by transactions under $3,000, with their share of spot volume recently exceeding 50%. This points to an increase in retail participation.
Short-term tailwind, medium-term caution
Historically, sustained spikes in Ether spot volume dominance have often signaled near-term strength for Ethereum, although they can also precede broader market cooldowns in the medium term. Over the past five years, Ether’s growing dominance has been closely linked to periods of increases in total crypto market capitalization, including 6 of the top 7 altcoin seasons.
Now that attention turns to Ethereum, the market could be laying the groundwork for another near-term expansion. Considering a possible Fed rate cut in September and that altcoins have typically outperformed Bitcoin following such decisions, Ethereum could maintain its volume dominance for a while.
Capital rotation heads towards ETH
An increased focus on Ethereum also triggered an accelerated capital rotation into ETH. Throughout August, Ether’s net position changes went up by 23%, while Bitcoin fell by around 43%. As a result, Ethereum has now surpassed Bitcoin in capital turnover, indicating that Traders are also reallocating funds towards ETH at the expense of Bitcoin.
While this sounds positive for Ether price, it is also a sign for a cautious medium-term outlook, as Such a development may mark the later stages of the market cycle.. In the previous two cycles, Ethereum attracted proportionally more capital inflows than Bitcoin did in the final months of the bull cycle. This means that markets could be approaching a deeper correction phase.
Higher ether liquidity with supply-side strength
Ether saw an improving liquidity landscape on CEXs, supporting the view of a possible price recovery in the near term. For example, the aggregate market depth of 2% across all CEXs increased by 21% during the last three months. 2% Depth of Market measures the total value of buy and sell orders within 2% of an asset’s current price, showing how much liquidity is available near the market.
Although this increase in liquidity has been primarily led by the demand side, the market has recently shifted towards supply dominance. A stronger supply-side cushion suggests firmer buy-side support, which can help absorb volatility and reduce downside risk.
In short, after the latest correction, the Ether market setup now looks healthier. A follow-on demand will determine whether Ether can convert this liquidity advantage into sustained price strength.
Ether faces the greatest selling pressure in 2025
Despite healthier liquidity conditions, Ether still faces significant selling pressure. of the ether The net volume of takers recently recorded its lowest point since the post-election surge at the end of 2024. Net volume of participants sample whether aggressive buyers or sellers dominate the stock markets, and negative values suggest more aggressive selling. At the same time, the Ether short position reached a new all-time high on CME, putting additional pressure on the asset.
Such a combination could lead to two possible outcomes: either Ether faces a short-term correction due to selling pressure, or it could see a local short squeeze if the bullish momentum remains intact. Either way, Ether appears poised for a significant directional move.
Conclusion
ETH’s dominance in spot volume, renewed relative strength against BTC, and positive capital turnover support the bullish 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 short term, consider keeping an eye out for three validation signs:
- Taker net volume turning towards neutral/positive,
- Supply Side Depth maintaining its leadership without a sudden retreat,
- Short Futures Positioning cooling.
If these conditions hold, the path of least resistance leans upward; Otherwise, a shakeout may precede the next bullish leg or even push the asset into a deeper correction.
