Ether Poised to Outperform Bitcoin as Momentum Shifts, Says Bybit

Ethereum (ETH) is gaining momentum and could be on track to outperform Bitcoin (BTC), according to Bybit’s latest market report. The December 2 analysis suggests that Ether’s increasing dominance is part of a broader shift, with the growing preference for Ethereum in both spot and derivative markets signaling a possible change in market dynamics.

Bybit’s Volatility Review for November 2024, co-authored with market researcher Block Scholes, highlights a notable trend: Ether has been steadily gaining ground against Bitcoin. This shift became especially apparent after the U.S. presidential election on November 5, when Ether outshone Bitcoin in both the cryptocurrency spot and derivatives markets. According to the report, there was a sharp decline in the ETH-BTC spot price ratio, indicating growing investor interest in Ethereum.

Bybit also noted that demand for Ether options has been rising, with traders increasingly favoring ETH over BTC. This trend has accelerated following the announcement on November 21 that U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler would step down, which brought additional attention and momentum to Ethereum.

Ethereum’s Growing Dominance: Signs of ‘Altseason’ Ahead?

The report also points to a growing dominance of Ether in the spot market. The ratio of ETH to BTC has surged from approximately 0.0325 on November 21 to over 0.04 by December 6, according to TradingView data. This shift indicates a clear preference for Ethereum among traders.

Felix Hartmann, founder of Hartmann Capital, believes this change is a signal that Wall Street is beginning to embrace the "alt rotation," with investors pivoting from Bitcoin to Ethereum. The surge in ETH’s performance aligns with what some see as the onset of an "altseason," where alternative cryptocurrencies (altcoins) begin to outperform Bitcoin.

In fact, recent data from CoinShares further underscores this shift. During the week of November 26, Bitcoin funds experienced outflows totaling $457 million—the first major outflows since September. Meanwhile, Ethereum funds saw inflows of $634 million during the same period, highlighting a clear preference for ETH among investors.

Bitcoin’s Market Dominance Fades

This trend is reflected in Bitcoin’s diminishing market dominance. As of December 6, Bitcoin’s dominance had fallen to below 52%, down from over 58% on November 21. This decline suggests that Ether’s growing market share is not just a temporary blip but part of a larger structural shift in the cryptocurrency market.

Volatility Expected to Increase for Ether

As ETH gains traction, Bybit also warns that increased volatility for Ether is likely. The exchange’s report points to a surge in ETH options market activity in November, indicating stronger demand for Ether’s volatility compared to Bitcoin. This surge in volatility, while not unusual for Ethereum, suggests that traders are positioning for larger price swings.

Bybit emphasized that this rise in ETH volatility is consistent with the cryptocurrency’s historical behavior. Ethereum has typically experienced larger price movements than Bitcoin, and this trend appears set to continue as demand for ETH continues to outpace BTC.

Overall, the shift toward Ether reflects broader changes in the cryptocurrency landscape. With Bitcoin's dominance waning and Ethereum continuing to gain ground, the crypto market may be entering a new phase—one where alternative assets like Ethereum take center stage.