Ethereum surged 30% in three weeks, outperforming Bitcoin, but is stuck below $3000! Are institutions hoarding ETH unable to break BTC's gravitational pull?

Ethereum starts strong, outperforming Bitcoin momentum continues

Zooming in, as market risk appetite returns, Ether (ETH) seems to be charting its bull market path. In less than three weeks, ETH has risen nearly 30%, approximately three times the increase of Bitcoin (BTC) during the same period.

The trend of the ETH/BTC exchange rate confirms this rotation, as the rate surged 20%. This momentum was strengthened by Bit Digital's action of exchanging 280 BTC for ETH, indicating an increased confidence among investors in Ethereum.

In summary, Ethereum's third quarter started strong, continuing the trend from the second quarter (when it outperformed Bitcoin by 1.2 times). However, even though Bitcoin has entered the price discovery phase (reaching all-time highs), the price of ETH has not fully reflected this shift in momentum.

Strong momentum but hard to break past highs, Ethereum faces breakthrough difficulties

The market dominance of Ethereum is gradually rising to around 10%, with a valuation of approximately $347 billion. Nevertheless, it still ranks second compared to Bitcoin's over 60% absolute market share.

This differentiation is not accidental. Since Bitcoin broke through the six-digit (one hundred thousand dollar) barrier, it has continuously set three new all-time highs (ATH), with the most recent peak reaching 111,936 dollars on July 9.

In comparison, Ethereum has not been able to close above $3,000 for over five months and is currently trading 43% lower than its historical high of $4,891 set in 2021.

Despite the strong performance in recent times, the ETH/BTC exchange rate is still severely suppressed, and it has not even recovered 50% from the five-year low (0.018) set at the beginning of the second quarter.

Institutional allocation accelerates, supply squeeze "textbook-level" scenarios emerge

Even so, the second quarter feels like a turning point. This is the first time since the 2021 bull market cycle that ETH has outperformed BTC on a quarterly basis. Moreover, this outperformance is not a random rebound.

Institutional allocation to Ethereum is reaching a critical point (original text: escape velocity).

Currently, five publicly visible institutional holders (Treasury Holders) hold a total of 240,000 ETH, with 95% of the cryptocurrency investment portfolio disclosed by Trump being ETH. BlackRock's ETH holdings have reached $4.45 billion, accounting for 42% of the market share in this sector.

This constitutes a textbook-level Supply-Squeeze scenario. However, the price movement still lags behind, which raises the market's doubts: is this breakthrough in Ethereum the beginning of its structural shift, or just another brief fluctuation in the Bitcoin-dominated cycle?

Key Challenge: Can Ethereum Break Free from Bitcoin's Gravity?

The reasons for Ethereum's upward breakout are accumulating. The price has cleanly broken above the $2,815 resistance level, and momentum indicators suggest it is likely to test the $3,000 **level. If the structure holds, the **upward trend is expected to continue.

But the key is: if Bitcoin (BTC) falls, can ETH decouple and strengthen independently? The evidence so far shows: no. Although Ethereum has a stronger fundamental and a growing ecosystem, its performance is still highly constrained by the Bitcoin cycle.

Even in May, when Ethereum was consolidating and Bitcoin was retreating from its historical highs, the performance of ETH lagged significantly, with a drop of 24%, which is twice the decline of Bitcoin (approximately 12%).

Critics sharply point out that Ethereum faces an identity crisis—wobbling between being a utility protocol and a growth asset, which is in stark contrast to Bitcoin's clear monetary narrative.

Since December of last year, Ethereum has undergone several major protocol upgrades, but its on-chain demand has still not shown significant improvement. Unless ETH can break this structural high correlation with BTC, its creation of a new historical high is still a long way off.