Ethereum is losing ground to Bitcoin, and this could be just the beginning

While the crypto market holds its breath, a note from 10x Research reignites the debate. Ethereum would now be a good short candidate. According to the firm, betting against ETH could offer an effective hedge against the institutional rise of bitcoin. This strategic reading shakes up the hierarchy between the two main assets in the sector.

A broken institutional mechanism

In its latest report, the firm 10x Research reveals a worrying shift in the Ethereum ecosystem. While bitcoin continues to absorb the majority of institutional flows, Ethereum finds itself lagging behind, weakened by a treasury mechanism that no longer works.

“As bitcoin continues to attract capital from institutional treasuries, Ethereum-oriented companies are starting to run out of ammunition”, asserts the cabinet in a cutting analysis. This loss of speed calls into question a model which, until now, had largely contributed to supporting ETH prices.

Several factual elements illustrate this rupture:

• The PIPE model is losing momentum: companies like BitMine allowed institutional investors to buy ETH at parity (cost price), before reselling it at a premium to the retail market, fueling a bullish loop on the price. This mechanism is running out of steam;

• A lack of transparency on flows: 10x Research highlights the vagueness surrounding capital movements in the Ethereum ecosystem, which increases uncertainty for institutional players;

• The concentration of assets: according to the data mentioned, 15 companies hold 4.7 million ETHincluding BitMine alone with 3.3 million ETH. This concentration raises the question of potential vulnerability if a disengagement were to take place;

• The imbalance compared to bitcoin: in comparison, BTC benefits from a clear narrative, reinforced by its function as a store of value, which mechanically attracts more institutional capital.

All of these factors converge towards the same observation: the institutional dynamic which until now supported Ethereum is now running out of steam, which could open the way to strategic readjustments in the market.

Bearish technical signals that worsen the context

Beyond these weakened institutional dynamics, 10x Research identifies several technical indicators suggesting a marked correction in the price of the asset.

“The weekly stochastic is clearly flashing in the top zone”warns the report. Analysts also point out that a false bullish breakout has formed, like the false breakdown observed last March, which could indicate a resumption of the bearish trend if the $3,000 support were to give way. In this scenario, a return to $2,700 would be possible in the short term.

This technical reading comes in a climate of overall market fragility, particularly after the October 10 crash, which led to the liquidation of $19 billion in crypto positions, a historic record. Since then, demand for spot ETH ETFs in the United States has cooled significantly, an indicator of the loss of institutional appetite for Ethereum.

This combination of technical signals and macroeconomic pressure fuels the thesis of a prolonged decline, or at least a worrying stagnation, at a time when bitcoin seems on the contrary to consolidate its dominant position.

If institutions begin to permanently turn away from Ethereum, the very perception of ETH as a fundamental asset of Web3 could be called into question. However, Tom Lee, president of BitMine, continues to anticipate a price of $10,000 for ETH at the end of the year.