Massive Bitcoin ETF Inflows vs Ethereum Sell-Off: Who Wins This Week’s Crypto Battle?

Bitcoin ETF Inflows Surge as Ethereum ETFs Face Outflows: What It Means for This Week’s Crypto Market

The cryptocurrency market kicked off this week with a wave of volatility following a dramatic divergence between Bitcoin and Ethereum ETF flows. According to data from Wu Blockchain and CoinShares, digital asset funds recorded a total inflow of $921 million last week — the highest since mid-2024. But the twist lies in where the money went: Bitcoin ETF inflows soared to $931 million, while Ethereum ETF outflows hit $169 million, marking the first weekly loss for ETH funds in over a month.

The numbers paint a clear picture of shifting investor sentiment — a growing preference for Bitcoin’s perceived safety amid global uncertainty, while altcoins like Ethereum temporarily fall out of favor. The question now is whether this trend will persist or if the market is gearing up for a sharp reversal.

Why Bitcoin ETF Inflows Are Soaring

Bitcoin continues to demonstrate why it’s regarded as “digital gold.” Despite fluctuations in price and regulatory headwinds, institutional confidence in Bitcoin remains unwavering. Three major factors explain last week’s surge in Bitcoin ETF inflows.

1. Trump’s Pardon of CZ Boosts Market Sentiment
In a surprising political twist, former U.S. President Donald Trump officially pardoned Changpeng Zhao (CZ), the founder of Binance, two years after his legal battles. Market analysts believe this move could pave the way for CZ’s return to a more active role within Binance, restoring confidence among investors who view him as a symbol of crypto resilience. The pardon acted as a psychological catalyst, fueling optimism across Bitcoin markets and prompting a sharp rise in ETF inflows.

2. Whale Accumulation Adds Confidence
On-chain data revealed that a well-known crypto whale — often referred to as a “smart money” investor for their impeccable market timing — accumulated 173.6 BTC last week. Such large-scale purchases often act as confidence signals for retail investors. Historically, whale activity tends to precede major bullish trends, and this instance appears no different.

3. Institutional and National Adoption Expands
Dubai’s decision to legalize Bitcoin and select cryptocurrencies for regulated use has sent ripples through the global investment landscape. The move is viewed as a gateway for institutional investors across the Middle East to channel capital into digital assets. Combined with growing global demand for Bitcoin ETFs, the event reinforces BTC’s reputation as the most secure and globally recognized cryptocurrency.

Ethereum ETF Outflows: Short-Term Fear or Long-Term Opportunity?

In stark contrast, Ethereum ETFs faced $169 million in outflows, a development that surprised many given ETH’s strong performance earlier this quarter. Analysts suggest that the sell-off was largely driven by short-term profit-taking rather than a loss of faith in the project’s fundamentals.

The U.S. Federal Reserve’s anticipated three interest rate cuts in 2025 were expected to fuel optimism across all risk assets, including cryptocurrencies. However, instead of a broad-based rally, investors concentrated their capital into Bitcoin — seeking stability during macroeconomic uncertainty.

Crypto strategist Alex Tan from Blockworks commented, “This is what we call a reverse risk rotation. In times of volatility, investors treat Bitcoin like a reserve asset while sidelining high-beta plays like Ethereum.”

The altcoin market’s weakness was evident as the altcoin index fell from 75 to 43 last week. But even amid this correction, Ethereum’s fundamentals remain strong.

Ethereum’s Technical Outlook

Despite the outflows, Ethereum has shown early signs of recovery. According to TradingView data, ETH is trading at $4,168.76, up 5% in the past 24 hours, with a trading volume jump of 156% to $40.1 billion.

• RSI: 53.15 — indicating growing buying pressure.

• MACD: Turned positive — signaling a shift toward a bullish trend.

If this upward momentum continues, ETH could target $4,300–$4,400 in the short term, with potential to reach $4,800 by year-end. However, a drop below $4,000 could invalidate the current rebound and lead to a brief consolidation phase.

Ethereum’s comeback depends largely on whether investor confidence returns once Bitcoin’s rally stabilizes. Many traders anticipate that once Bitcoin’s price finds equilibrium, capital rotation will flow back into ETH and other large-cap altcoins.

Bitcoin Price Prediction: Is $120,000 Next?

Bitcoin’s price action remains the centerpiece of this week’s crypto outlook. After finding strong support around $110,000, BTC has steadily climbed to $115,400, driven by renewed demand from both retail and institutional investors.

Technical indicators suggest room for further upside:

• RSI: 55.6 — still below the overbought threshold, signaling sustainable momentum.

• MACD: Forming a bullish crossover — a technical indicator of potential breakout continuation.

If Bitcoin manages to breach $116,500, analysts predict it could quickly test $120,000, aligning with the next major psychological resistance. The ongoing ETF inflows and macroeconomic optimism further reinforce the bullish case.

Institutional Data Backs the Rally

CoinShares’ report noted that the United States accounted for 87% of last week’s crypto inflows, underscoring how Bitcoin ETFs have redefined institutional participation in the market. The demand surge from wealth management firms, pension funds, and hedge funds reflects growing acceptance of Bitcoin as an asset class akin to commodities like gold or oil.

Meanwhile, Ethereum’s outflows — though negative in the short term — may represent a healthy reallocation phase before the next major market cycle. Similar trends were seen in early 2021 and 2023, both of which preceded strong ETH rebounds.

Between Confidence and Caution

As the market digests the latest ETF data, both Bitcoin and Ethereum are entering a pivotal phase. Bitcoin’s dominance continues to climb, reaching 54.3%, while Ethereum’s market share slipped slightly below 17%. But historical patterns suggest that such divergences rarely last long.

With key macro events on the horizon — including the Federal Reserve’s next meeting and several major ETF filings — volatility is likely to stay elevated. Traders are advised to watch liquidity levels, as ETF-driven inflows and outflows can trigger sharp intraday swings.

CryptoQuant analysts emphasize that “ETF flows are now the heartbeat of this market. Every billion-dollar shift in or out has a measurable impact on sentiment, liquidity, and price direction.”

Outlook: What to Expect This Week

The coming days will determine whether Bitcoin can sustain its momentum and whether Ethereum can reverse its outflows. If macroeconomic data continues to favor risk assets, both BTC and ETH could rally in tandem.

Bitcoin remains positioned as the market leader, fueled by institutional adoption, whale accumulation, and renewed confidence in its long-term deflationary narrative. Ethereum, on the other hand, is likely to benefit once capital rotation resumes toward high-utility blockchain ecosystems.

As of now, the market is cautiously optimistic — leaning toward another potential breakout week. But in crypto, confidence can turn to caution in seconds. The next wave of ETF data will either confirm Bitcoin’s dominance or signal Ethereum’s long-awaited comeback.

Writer @Ellena

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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