Ether (ETH) Leads Crypto Rally, Pulling Bitcoin (BTC) Higher

Ether's Rally Lifts Bitcoin, But Caution Flags Remain

Ether (ETH) spearheaded a cryptocurrency rally over the weekend, rising from $4,000 to over $4,300 and pulling Bitcoin (BTC) along. Bitcoin subsequently took the lead, increasing from $119,000 to $122,300.

According to Alex Kuptsikevich, a senior analyst at FxPro, this is unusual. “This is one of the few times when a rally in major altcoins has inspired BTC to break through. It’s usually the other way around.”

Spot Market Demand Drives Bitcoin

Bitcoin's rise continues to be fueled by spot market demand, with the ratio between futures and spot market trading volumes at its lowest since 2022, according to Swissblock Technologies.

Cautionary Signals for Bitcoin

Despite the bullish momentum, some indicators suggest caution:

Bitcoin trades at a discount on Coinbase compared to Binance, suggesting weak U.S. institutional demand.
Trading volumes are lower than in July when prices initially hit $120,000, indicating weaker buying pressure.

Ether's Bullish Sentiment

Ether shows stronger bullish sentiment than Bitcoin. On Deribit, open interest in ether calls is about 2.3 times greater than in ether puts. The data for Bitcoin is well below 2. On-chain activity supports ETH's rise, with record daily transaction volumes and new addresses approaching four-year highs.

Sentora indicates that 97% of ETH-holding addresses are “in-the-money,” increasing the incentive to take profits, which could trigger pullbacks.

Altcoin Season Potential

XRP also saw gains, rising 3% early Monday. The broader altcoin market may rally as Bitcoin's dominance rate approaches a key support level.

Traditional Markets

The U.S. two-year Treasury yield fell below its 200-day average for the first time since 2022, supporting expectations for Federal Reserve interest-rate cuts. A September rate reduction is increasingly likely, even if CPI data exceeds expectations.

Upcoming Events

August 15: Next FTX distribution to eligible claimants.
August 18: Coinbase Derivatives to launch nano SOL and nano XRP perpetual futures.
August 20: Qubic's first yearly halving event.

Token Talk

LayerZero Foundation proposed acquiring Stargate (STG), merging its token economy into the LayerZero ecosystem, consolidating cross-chain infrastructure under a single governance and rewards asset. The plan would convert all STG into ZRO at a fixed swap ratio, retiring STG entirely.

Derivatives Positioning

Bitcoin's rally showed little impact on derivatives, with futures open interest remaining below 700K BTC.
Ether open interest increased to 13.68 million ETH.
Capital is flowing into altcoin derivatives, led by XMR, UNI, and BCH.

Market Movements

BTC is up 3.76% from 4 p.m. ET Friday at $121,289.53 (24hrs: +2.69%)
ETH is up 5% at $4,261.1 (24hrs: +1.43%)

Technical Analysis

Bitcoin's dominance rate is testing long-term rising channel support. A breakdown could signal the start of an “alt season.”

Crypto Equities

Microstrategy (MSTR): closed on Friday at $395.13 (-1.71%), +4.17% at $411.60 in pre-market
Coinbase Global (COIN): closed at $310.54 (-0.08%), +4.62% at $324.90

ETF Flows

Spot BTC ETFs:

Daily net flows: $403.9 million
Cumulative net flows: $54.41 billion
Total BTC holdings ~1.29 million

Spot ETH ETFs:

Daily net flows: $461 million
Cumulative net flows: $9.83 billion
Total ETH holdings ~5.72 million